Eurozone inflation will hit 1.7pc in 2016 says ECB
European Central Bank President Mario Draghi has confirmed he sees rates at present or lower levels for an extended period of time, but has opted to do nothing when it comes to taking action.
The bank revealed this afternoon that it expects annualised inflation to hit 1.5 per cent in 2016, and 1.7 per cent in the fourth quarter of the year.
It's also upped its growth forecast to 1.2 per cent for this year.
Draghi said the bank is prepared to take action to boost recovery “if required”.
Of course, many would say the current accommodative stance is doing enough to target persistently low inflation and weak economic data in a significant number of Eurozone countries.
Draghi said recovery in the economic area is proceeding in line with the bank’s previous assessment – moderately – but an dovish stance still needs to be taken for as long as necessary.
He expects inflation to rise gradually toward two per cent – but only after a long period of staying low. Inflation, he added, is “firmly anchored.”
Here’s a rundown of what the bank expects in terms of growth and inflation:
GDP
2014: 1.2 per cent (up from 1.1 per cent); 2015: 1.5 per cent; 2016: 1.8 per cent
Inflation
2014: 1.0 per cent (down from 1.1 per cent); 2015: 1.3 per cent; 2016: 1.5 per cent
The (slight) improvement in outlook saw the euro jump 50 pips to 1,3800 against the dollar.