ECB vows to fight low inflation as Draghi warns of triple threat to eurozone…(Toast!)
By Szu Ping Chan
Telegraph.co.uk
7 APRIL 2016
European Central Bank policymakers have underscored their commitment to fight low inflation and boost eurozone growth, as its chief warned of a triple threat facing the 19-nation bloc.
Mario Draghi said the central bank would act as an “anchor of confidence” amid an uncertain global economy, powerful deflationary forces and “questions about the direction of Europe”.
“The ECB does not surrender to excessively low inflation,” he wrote in its annual report.
It came as Vítor Constâncio, the ECB’s vice president, and Peter Praet, its chief economist, suggested that policymakers stood ready to slash interest rates deeper into negative territory if further shocks materialised.
Mr Constâncio said the ECB would do “whatever is needed” to lift inflation back up to its target of just below 2pc. Prices in the eurozone fell by -0.1pc in the year to March.
The dovish comments pushed down the value of the euro against the dollar by as much as 0.5pc, to $1.1338 (£1.2433).
However, minutes of the ECB’s latest policy revealed growing disquiet among a minority of the ECB’s governing council about its souped-up stimulus programme.
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