ECB ready to act against downside risks to inflation, Liikanen says

The European Central Bank stands ready to act to safeguard price stability amid downside risks to euro area growth and prices, a member of the European Central Bank’s governing council said on Tuesday.

Speaking to the Finnish parliament’s Commerce Committee, Erkki Liikanen said the ECB’s inflation target should be symmetrical, allowing it to react both to consumer price pressures as well as too low.

"The Governing Council is willing and able to act by using all the instruments available within its mandate if warranted in order to maintain an appropriate degree of monetary accommodation,” the rate-setter said.

“The growth and inflation outlook is still subject to downside risks," Liikanen added.

However, he cautioned that structural reforms are also needed to sustain economic growth, going on to say that monetary policy alone cannot sustain economic growth.