ECB urged to act together on inflation
At Draghi’s last meeting strong call for unity to tackle low inflation
The European Central Bank’s policymakers have been urged to put their differences behind them and unite to tackle inflation.
The unified view came at the final policy meeting of outgoing ECB president Mario Draghi.
The ECB’s Governing Council had previously been bitterly divided over Draghi’s easy monetary policy. Many said it risked creating new asset bubbles and putting the stability of the financial system at risk.
“It was regarded as important to form a consensus and to unite behind the Governing Council’s commitment to pursuing its inflation aim,” the ECB minutes said.
At the heart of the call was the council’s belief that the balance of risks about growth remained negative. This was owing to geopolitical factors, rising protectionism and ongoing vulnerability in emerging markets.
As a result, the council said there was a risk that global growth may remain subdued for longer than anticipated.
“In the context of disentangling the sources of this weakness, the question was raised as to what extent the downturn in the tech cycle constituted a separate factor, independent of the weakness related to trade tensions,” the bank said.
Low energy prices and sluggish growth suggested that inflationary pressures may not pick up in the immediate future, it continued.
To tackle weaker growth the governing council agreed in September to restart an asset-purchasing programme, known as quantitative easing. The aim was to keep short-term lending rates low to foster demand for investment from both individuals and businesses throughout the region.
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