ECB to Act If Upside Inflation Risks Materialize, Holzmann Says
The European Central Bank will adjust its monetary policy if upside risks to inflation materialize, said Governing Council member Robert Holzmann.
The Austrian central bank chief said projections still pointed to price growth slowing to the ECB’s 2% target by the end of 2022, despite the risk of a faster pace in the short run.
“When this sharp decline isn’t there, other colleagues will certainly make a revision and we’ll change our monetary policy,” Holzmann said Saturday on Austria’s Oe1 public radio.
On Thursday, the Frankfurt-based institution confirmed it would wind down its pandemic bond-buying program but temporarily expand an older one to ease the transition.
Other major central banks have tightened monetary policy faster. The Federal Reserve has doubled the pace of its stimulus exit, and the Bank of England on Thursday delivered a surprise increase in interest rates -- the first among major central banks since the pandemic struck -- citing “more persistent” inflation.
On Friday, ECB Governing Council member Pierre Wunsch said the euro area risked falling behind peers in confronting soaring prices.
In the interview, Holzmann played down the importance of dissent within the governing council, and said differences only related to nuances of monetary policy. He declined to comment on his own decision.
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