Summary
[The European Central Bank agrees to a 2% new inflation target to allow inflation to overshoot]According to informed officials, the European Central Bank policymakers have agreed to raise the inflation target to 2%, and leave room to exceed this target if necessary. The agreement was reached at a special meeting this week to end the ECB’s strategic review. A spokesperson for the European Central Bank declined to comment. Compared with the previous target of “below but close to 2% in the medium term”, the 2% target will be a major change. Some policymakers believe that the previous wording was too vague, leading people to call for policy tightening prematurely. (21st Century Business Herald)
According to officials familiar with the matter, European Central Bank policymakers have agreed to raise the inflation target to 2%, and leave room to exceed this target if necessary. The agreement was reached at a special meeting this week to end the ECB’s strategic review. A spokesperson for the European Central Bank declined to comment. Compared with the previous target of “below but close to 2% in the medium term”, the 2% target will be a major change. Some policymakers believe that the previous wording was too vague, leading people to call for policy tightening prematurely.
(Source: 21st Century Business Herald)
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