More hints of policy easing from Mario Draghi, who says the European Central Bank is ready to act in March if financial market turmoil reduces inflation expectations. As David Pollard reports, Mr Draghi was addressing the European Parliament.
It's a well-worn routine. First the promise of easing - that often enough to, effectively, do some easing on its own. Followed by the policy action itself - though sometimes by not quite as much as promised. This time, says Mario Draghi, the ECB's on the look out for how imported inflation - like rock-bottom oil prices - will impact wage and price pressures in the euro zone. And: on the alert for the impact of the rout in asset markets. SOUNDBITE (English) ECB PRESIDENT, MARIO DRAGHI, SAYING: "In the light of the recent financial turmoil, we will analyse the state of transmission of our monetary impulses by the financial system and in particular by banks. If either of these two factors entail downward risks to price stability, we will not hesitate to act." With some action at the ECB's March meeting appearing all but guaranteed, according to economists, the key thing now is the detail of what form it might take. Panmure Gordon's Simon French. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "They'll be looking ... for further clues as to whether he's going to get approval from mainly the German members of the European Central Bank governing council as to whether the rate of purchases can increase this time round or indeed the scope for which quantitative easing in terms of the assets that can be bought, is going to be broadened." German support for further action may be a little easier to obtain than before. The Bundesbank has slashed its inflation forecast from 1.1 to just 0.25 per cent for this year. But while there appears to be firm support for a deposit rate cut within the ECB Governing Council, watchers describe the appetite for more radical action as still limited.