ECB ready to adjust policy if inflation doesn’t fall as expected – Holzmann

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FILE PHOTO: European Central Bank policymaker Holzmann attends a news conference in Vienna

ZURICH – European Central Bank (ECB) policymaker Robert Holzmann said on Saturday the ECB will quickly be able to assess if inflation falls as expected next year and can adjust its monetary policy accordingly.

“There are indications that there’s a danger that inflation comes in higher (than the current forecast),” Holzmann told Austrian broadcaster OE1 in an interview. “But it’ll be possible to control this assessment very quickly when we see where the inflation rate goes next year.”

“If there’s no sharp decline, other (central bank) colleagues will certainly review their positions and we’ll change our monetary policy,” he said, calling this week’s ECB decision “well balanced” also in light of uncertainty caused by the new Omicron coronavirus variant.

A diverse group of policymakers spoke out on Friday, warning the ECB may be underestimating inflation risks after the bank extended stimulus measures.

Sources had told Reuters that Austria’s central bank governor Holzmann was among conservative policymakers who dissented from the ECB’s decision to continue bond purchases.

Holzmann declined to comment on how he voted, adding differences in voting behaviour were based on nuances rather than big divergencies.

“All of us in the ECB governing council stand ready to take action in case the inflation forecast goes up. Then measures still in place can be reduced or stopped,” he said.

(Reporting by Silke Koltrowitz; Editing by Mark Potter)