Policymakers are set to review the factors that are acting as a drag on euro area inflation and will use all available tools to bring price growth to target if there are downside risks to the outlook, European Central Bank President Mario Draghi said Friday.
"If we decide that the current trajectory of our policy is not sufficient to achieve that objective, we will do what we must to raise inflation as quickly as possible," Draghi said in a speech in Frankfurt.
Draghi had revealed in October that policymakers discussed interest rate cuts. The accounts of the October 22 rate-setting session, released Thursday, confirmed that policymakers are set to review all available tools in December that will help to achieve the ECB's price stability goal of bringing inflation 'below, but close to 2 percent'.
On December 3, the bank is widely expected to raise the size of its monthly asset purchases to EUR 80 billion from EUR 60 billion and also extend the EUR 1.1 trillion programme beyond its September 2016 deadline. A reduction of the already-negative deposit rate is also possible.
"We consider the APP [asset purchase programme] to be a powerful and flexible instrument, as it can be adjusted in terms of size, composition or duration to achieve a more expansionary policy stance," Draghi said.
"The level of the deposit facility rate can also empower the transmission of APP, not least by increasing the velocity of circulation of bank reserves."
Policymakers are not yet confident that the process of economic repair in the euro area is complete. If the 19-nation needs more monetary stimulus, the ECB will not hesitate to provide, he added.
Regarding inflation, Draghi pointed out that the low level of underlying inflation suggest relatively weak price pressures going forward. "In making our assessment of the risks to price stability, we will not ignore the fact that inflation has already been low for some time," he said.
For comments and feedback contact: editorial@rttnews.com
Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.