The European Central Bank council member and the governor of the Bank of Italy, Mario Draghi said yesterday that the monetary policy should be tightened in case the inflation in Eurozone will start to cross the target borders.
While many investors debate whether ECB will prefer fighting the economy growth slowdown or the consumer prices surge, Draghi is convinced that low inflation is the factor which is keeping the economy growth of the Eurozone, by supporting both employment rate and consumers’ spendings.
Jean-Claude Trichet, ECB President, has also stated his awareness of the dangers of inflation and that he is ready to rise the interest rate if required.
Meanwhile some other ECB council members are less confident in the rate increase as a good tool in fighting the inflation during the current global financial volatility. Guy Quaden (Governor of the National Bank of Belgium) pointed out that ECB should be more careful with adjusting the current interest rate and that inflation shouldn’t play a big role in this concern.
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