ECB to Monitor Data ‘Very Closely’ for Signs of Slower Inflation

The European Central Bank said it will look for signs in economic data that inflation could slow more than it currently anticipates.

“In the coming weeks, the Governing Council will monitor very closely all incoming information on economic and monetary developments and assess any impact on the outlook for price stability,” the ECB said in its monthly bulletin today, echoing President Mario Draghi’s April 4 policy statement. “The monetary policy stance will remain accommodative for as long as needed.”

Draghi said last week that officials are currently “looking at various instruments” to support an economic recovery, including interest-rate cuts and non-standard measures, such as a program to encourage lending to small- and medium-sized companies.

Inflation risks remain broadly balanced, the ECB reiterated in today’s bulletin. The central bank aims to keep inflation just below 2 percent. It slowed to 1.7 percent in March.

The ECB last month cut its growth and inflation forecasts and now expects the 17-nation economy to shrink 0.5 percent this year before growing 1 percent in 2014. Inflation will slow to 1.3 percent next year from 1.6 percent this year, according to the forecasts.

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