Draghi says EU inflation not high enough to tighten policy

Frankfurt

MARIO Draghi sought to quash the idea that the European Central Bank will begin tightening policy sooner than planned, saying that inflation in the euro area isn't strong enough for officials to start signalling such a shift.

The ECB president said in a speech in Frankfurt on Thursday: "We have not yet seen sufficient evidence to materially alter our assessment of the inflation outlook - which remains conditional on a very substantial degree of monetary accommodation." Mr Draghi's message comes after weeks of diverging signals from policymakers on the strategy the central bank will follow to exit its unprecedented stimulus. With the region's upturn gaining momentum, the threat of deflation off the table, and slower purchases in the ECB's 2.28 billion-euro (S$3.4 billion) quantitative-easing plan as of this month, some governors have been urging tweaks to the central bank's forward guidance.