ECB’s de Guindos: Reduce Energy Support to Avoid Adding to Price Pressures

30 October 2023

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Vice President Luis de Guindos on Monday said that that governments should further reduce support measures related to the energy crisis to avoid adding to price pressures.

In a speech at the Business Leadership Forum in Madrid, a text of which was posted to the website of the ECB, de Guindos said that ‘[a]s the energy crisis fades, governments should continue to roll back the related support measures.’

‘This is essential to avoid driving up medium-term inflationary pressures, which would otherwise call for even tighter monetary policy’, he said.

Geopolitical tensions and wage increases could bolster inflation, he said, stressing that the outlook was still uncertain.

‘By contrast, a stronger transmission of monetary policy or a worsening of the global economic environment would ease price pressures', he said.

De Guindos avoided conclusive statements about the next meeting in December, highlighting simply that new data and projections would be available by then.

‘We will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction’, he said.

‘[W]hile remaining significantly above our medium-term target of 2%, recent inflation data have been in line with our expectations, confirming that our monetary policy is working', he said.