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ECB’s Visco says flexible approach needed in unwinding stimulus

© Reuters. FILE PHOTO: European Central Bank Governing Council member Ignazio Visco looks on during an interview with Reuters, in Rome, Italy, May 31, 2021. REUTERS/Guglielmo Mangiapane

PARMA, Italy (Reuters) – The European Central Bank will keep a flexible approach as it unwinds its ultra-expansionary monetary policy, monitoring not only inflation threats but also risks of uneven financing conditions across euro zone countries, a top policymaker said.

ECB Governing Council member Ignazio Visco told the ASSIOM-FOREX annual conference that the impact of an energy price shock should gradually wane in 2023, provided inflation expectations remain anchored and in the absence of a wage-price spiral.

Visco said inflation pressures had turned out to be more prolonged than initially envisaged and, in the short term, risks of higher consumer prices had increased.

But so have risks of slower economic activity.

“The council’s March meeting must carefully examine and discuss these developments and their possible consequences,” he said.

Visco, who is also the Bank of Italy governor, said it was important for the ECB to move very gradually in the unwinding of its policy stimulus.

ECB’s Visco says flexible approach needed in unwinding stimulus

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