ECB's Nowotny sees mild inflation rise

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Reuters

VIENNA - Inflation will not rise by much and the European Central Bank's independence will shield it from political pressure to allow inflation, ECB Governing Council member Ewald Nowotny was quoted as saying.

"We are currently in a situation where we have less than 1 per cent inflation, and in the coming year this will not rise significantly," Nowotny was quoted as saying in an interview in Austrian newspaper Die Presse published on Friday.

Asked if expansionary monetary and fiscal policy did pose a risk for price stability, Nowotny said that the ECB's non-standard measures would automatically reduce money supply when they expire.

"The really big amounts we are talking about are the ECB's liquidity measures. When they expire, (this liquidity) is drained automatically."

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