ECB Maintains Flexible Monetary Policy Amid Global Risks

MILAN (Reuters) – The European Central Bank (ECB) will keep a flexible approach to monetary policy decisions as conflicts in the Middle East and U.S. trade policy pose additional risks, a senior official stated.

ECB Governing Council member Fabio Panetta, who leads Italy’s central bank, indicated that inflation in the euro zone is expected to remain under the 2% target for a prolonged period in light of a “persistently weak” economy.

In a speech at a Milan banking conference, Panetta highlighted the “substantial and difficult-to-quantify risks” affecting the economic outlook due to U.S. trade policies and developments in the Middle East.

Against this backdrop, the ECB’s Governing Council confirmed its flexible approach during its last meeting, emphasizing that it will make monetary policy decisions on a meeting-by-meeting basis without pre-committing to a specific course of action.