European Central Bank policymaker Ewald Nowotny is worried about the euro zone economy, which he said was showing signs of clouding over.
Asked about inflation and unemployment, he told reporters: “I am concerned as well. What I have presented here is not a really great success story. We had expected an upturn in the euro zone and we have an upturn – 2014 is better than 2013 – but it is weaker than expected.”
The ECB is unlikely to take new policy action next week unless August inflation figures, due on Friday, show the euro zone sinking significantly towards deflation, ECB sources said this week. Inflation in July fell to 0.4 percent, well below the ECB’s target of nearly 2 percent. Nowotny declined to discuss potential monetary policy approaches, citing the quiet period before an ECB rates meeting next week.