SINTRA, Portugal (Reuters) – The European Central Bank will ease policy again if inflation does not head back to its target, ECB President Mario Draghi said on Tuesday, reinforcing market expectations that it will offer further stimulus in the coming weeks.
The ECB has undershot its inflation target of just under 2 percent since 2013 and a slowdown in growth has raised the risk that price growth will ease further, despite years of extraordinary accommodation.
“In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required,” Draghi told the ECB’s annual conference in Sintra, Portugal.