“At this moment, concerns about an increase in the inflation rate in the euro area are exaggerated, and the current price pressures reflect temporary factors that will fade over time,” said Gabriel Makhlouf, a member of the European Central Bank’s Board of Governors.
“But vigilance and caution are required so that we can act as it should if conditions change. Our commitment to price stability remains as strong as is our ability to combat any unsustainable inflation in the eurozone,” Makhlouf added.
“There is a great deal of uncertainty about the continuation of price pressures and we need to interpret this data and the outputs of our models with caution,” Makhlouf was quoted by Bloomberg News Agency as saying.
He pointed out that “increasing interest rates to deal with a temporary rise in prices would be harmful as we try to restore the economy’s health.”
“With the current correct monetary and fiscal policies, any strong recovery driven by strong demand will lead to a return of the inflation rate in the medium term to 2 percent, which is our target rate,” the European banker continued.