ECB confident that inflation rising back to target: Praet

BERLIN (Reuters) – Robust euro zone growth and increasingly evident wage pressures support the European Central Bank’s confidence that inflation is on its wage back to target, ECB chief economist Peter Praet said on Wednesday.

“Signals showing the convergence of inflation towards our aim have been improving, and both the underlying strength in the euro area economy and the fact that such strength is increasingly affecting wage formation supports our confidence that inflation will reach a level of below, but close to, 2 percent over the medium term,” Praet said in Berlin.

“Waning market expectations of sizeable further expansions of our program have been accompanied by inflation expectations that are increasingly consistent with our aim,” he added.

Having revived growth with an unprecedented stimulus scheme, the ECB is now debating whether to roll back support further later this year, satisfied that inflation is rising back towards it target of almost 2 percent.

“Next week, the Governing Council will have to assess whether progress so far has been sufficient to warrant a gradual unwinding of our net purchases,” he added.

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