• Coeure says officials are monitoring inflation expectations
  • Hansson, Jazbec have urged caution on more buying, rate cut

The European Central Bank has yet to decide on further easing and isn’t committed to doing so next month, Executive Board member Benoit Coeure said.

“The decision isn’t taken,” he said in an interview published in Le Figaro newspaper that was confirmed by his office. “The debate is open.”

Coeure said the recovery in the euro area is “on track.” Data on Friday may show economic growth of 0.4 percent in the third quarter, matching the pace of the previous three months. Purchasing managers’ surveys indicate expansion continued in the current quarter.

“It’s accelerating, but it remains weak, while inflation expectations have stopped improving and underlying inflation has hit a ceiling,” Coeure said.

ECB President Mario Draghi, who will testify in the European Parliament on Thursday, has indicated that policy makers may ramp up stimulus again at their meeting next month, though not every Governing Council member has voiced support. Officials including Estonia’s Ardo Hansson and Slovenia’s Bostjan Jazbec have urged caution over ramping up asset purchases or cutting the deposit rate.

The Frankfurt-based ECB is attempting to boost an inflation rate that’s far below its target of just under 2 percent, at a time when falling commodity prices and slowing global trade are depressing price gains. Coeure’s remarks emphasize that new forecasts provided to policy makers in December will be key to whether they act.

“We take our decisions as a function of the economy and not the financial markets,” he said in Le Figaro. “The question we’re currently asking ourselves is the following: certain specific factors such as the drop in commodity prices, are they temporary? Or will they prevent the return to inflation of near 2 percent in a durable way? If the answer to the second question is positive, then additional measures will be taken. We’ll decide in December based on the information at our disposal.”

In the meantime, there have been signs that the China-led slowdown in emerging-market economies is having knock-on effects in the euro area, as German industrial production fell for a second month in September. That followed a third-straight monthly decline in factory orders.

“Whatever is happening in the rest of the world, our monetary policy system allows us to maintain interest rates that are very low,” Coeure said.

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