ECB's Trichet-core inflation not good price predictor -WSJ
FRANKFURT Jan 23 (Reuters) - The euro zone inflation rate, excluding volatile energy and food prices, does not gauge future price pressures well, European Central Bank President Jean-Claude Trichet was quoted as saying on Sunday.
In an interview with the Wall Street Journal, Trichet said that the greatest danger right now would be to stop the reform process that started during the financial crisis.
"In our case, we consider that core inflation is not necessarily a good predictor for future headline inflation," Trichet told the newspaper.
"That being said, all central banks, in periods like this where you have inflationary threats that are coming from commodities, have to go through the hump and be very careful that there are no second-round effects. This is what we are doing."
Trichet also said euro zone policy interest rates, currently at a record-low level of 1.0 percent, are appropriate.
"We could lose momentum in the reforms that are still urgently needed. That is the main danger," he said. More balanced public spending would not hamper growth -- on the contrary, it creates confidence which fosters growth, he added. (Reporting by Sakari Suoninen; Editing by Diane Craft)
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