HELSINKI (Reuters) – The economy of the euro zone is better than expected of American customs duties, which leaves the risks of inflation “completely contained,” said Christine Lagarde, president of the European Central Bank (ECB) on Tuesday.
Frankfurt has maintained its interest rates that have been unchanged since June and indicated that it was not in a hurry to adjust its monetary policy more, since the economy is doing well and that inflation is now around its target of 2%.
Investors have largely dismissed the possibility of an upcoming new drop in interest rates and most of the monetary policy leaders believe that a serious debate on the advisability of providing additional support to the economy will not take place before December.
“As we could foresee, the risks for inflation seem fairly limited in both directions,” said Christine Lagarde at a conference in Helsinki.
“With 2%guiding rates, we are well placed to react if the risks for inflation change or if new shocks threaten our goal,” she said.
It argued that commercial shocks did not create new inflationary pressures and that the ECB was therefore not confronted with conventional arbitration which consists in having to manage a period of slowdown in growth and price increase.
Preliminary data on the inflation of the euro zone in September will be published on Wednesday, and analysts expect block prices to increase 2.2%, a slight acceleration which should reinforce the ECB’s position to maintain its unchanged rates.
(Report Anne Kauranen; written by Balazs Koranyi, Diana Mandia, edited by Kate Entringer)
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