by Andrew Langley
BNN Bloomberg
(Bloomberg) — The European Central Bank faces significant dangers to achieving its inflation goal, according to Vice President Luis de Guindos, who cited factors that could pull prices too far in either direction.
“While we expect inflation to return to our 2% target next year, the outlook is surrounded by substantial risks,” the Spanish official said Monday. “The geopolitical situation, especially in the Middle East, poses a particular upside risk to inflation.”
Among other such factors, he listed corporate profit margins and upward pressure on salaries in the euro area. Downside risks include a stronger-than-anticipated dampening impact of monetary policy on demand, or an unexpected worsening of the global economic backdrop, Guindos said in London.