Outgoing Governing Council member Francois Villeroy de Galhau said on France 5 on Tuesday that current oil-driven price pressures have not spread enough across the euro zone.
He said the ECB would raise rates if second-round effects emerged and inflation risked becoming broad-based and persistent, but added there are not yet sufficient signs of such propagation.
The remarks suggest policymakers are not ready to tighten policy solely because of higher oil prices, unless energy costs feed more widely into wages and underlying inflation.
Is the ECB’s rate-hike patience pushing a fragile Eurozone economy toward 1970s-style stagflation?
What specific evidence would force the ECB to raise rates, even if it risks tipping Europe into a recession?