Policy makers in Europe are positioning to provide further stimulus to EU economies should low inflation become entrenched

Policy makers in Europe are positioning to provide further stimulus to EU economies should low inflation become entrenched. ECB President Mario Draghi said, what we need to be particularly watchful for at the moment is, in my view, the potential for a negative spiral to take hold between between low inflation, falling inflation expectations and credit, in particular in stressed countries, Speaking at an ECB conference in Sintra, Portugal Draghi added, the key issue today, however, is timing. Indicating that the ECB is focusing on liquidity measures it could deploy to help free up lending to companies and households. Possible measures being discussed include interest-rate cuts and liquidity injections, while holding out the prospect of asset purchases as a more powerful option. Read the full article from Bloomberg: (VIEW LINK)


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