–Adds Comment That Current ECB Interest Rates Are “Appropriate”
HELSINKI (MNI) – Inflation is still not a big concern for the
European Central Bank’s Governing Council, but with HICP rising more
than 2% the ECB must now be more careful, Council member Erkki Liikanen
said early Friday in an interview with Finnish television.
“When we see how the amount of credit and money supply is
developing, it is really moderate, so there is not yet a large concern,”
Liikanen, the Finnish central bank governor, told Finland’s TV1. “But of
course, whenever this kind of [inflation] peak happens, carefulness must
be added.”
The Eurozone’s harmonized consumer price index spiked to 2.2% in
December, the highest level in more than two years and notably above the
ECB’s price stability goal of close to but below 2%.
“Whenever this 2% limit is topped, we of course must be really
careful and attentive, and [this is true] now too,” he said. “But still,
when you look at the price expectations and what consumers and companies
are thinking, they are anchored to 2%.”
Liikanen, like ECB President Jean-Claude Trichet on Thursday,
stressed that the recent acceleration of consumer inflation “originates
mainly from the rise of energy prices.” And, he added, “if it does not
transfer or multiply in the economy, we can avoid the concern.”
He added: “The markets have estimated that the [ECB's] stance has
not changed, and as we stated yesterday the current interest rate level
is appropriate in this economic situation.”
[TOPICS: M$$EC$,M$X$$$,MT$$$$,MGX$$$,M$$CR$]