MILAN (Reuters) -The European Central Bank will keep a flexible approach to monetary policy decisions against a backdrop where the conflict between Israel and Iran compounds risks from Washington’s trade policy, a top policymaker said on Wednesday.
ECB Governing Council member Fabio Panetta, who heads Italy’s central bank, said euro zone inflation was likely to remain below the 2% target for an extended period, against a “persistently weak” economy.
Panetta, in a speech at a Milan banking conference, pointed to “substantial and difficult-to-quantify risks” for the economic outlook stemming from the U.S. trade policy and the situation in the Middle East.
“Against this backdrop, the ECB’s Governing Council, at its most recent meeting, reaffirmed a flexible approach, keeping its options open,” he said.
“It will continue to take decisions on a meeting-by-meeting basis, without pre-committing to a defined course for monetary policy,” he added.
(Reporting by Valentina Za, editing by Gianluca Semeraro and Jane Merriman)
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