- There are always circumstances for more policy but doesn’t see timing for this to happen
- Mid-term inflation expectations still anchored and ECB will be watching any deviation from target
- Favours a steady hand ECB policy watching impact of of steps already taken
- Core inflation less divergent but still below goal
- Energy prices are a major factor in low inflation rate
- General ECB view is that inflation is not high enough
Of course the falling oil/energy prices has added to the fall in inflation but the reality is that inflation was well on the slide before lower prices kicked in. It’s a weak argument to use this late in the day.
Eurozone HICP vs Brent crude & Nat gas prices 24 11 2014
If anything, there’s the prospect of even lower inflation based on the recent slide in energy prices which is why the core number will become more important.
