ECB's Nowotny says expects decision on ECB policy move in June

WASHINGTON, April 11 Fri Apr 11, 2014 2:47pm EDT

WASHINGTON, April 11 (Reuters) - The European Central Bank is likely to decide on the way it wants to respond to the low inflation in the euro zone at its meeting at the start of June, when it has more data available, ECB Governing Council member Ewald Nowotny said on Friday.

"In June we will have a new forecast for the rest of the year, we will have the data for the first five months, so I think that therefore this is something that gives us a full picture," Nowotny told a briefing on the sidelines of the International Monetary Fund's annual meeting.

Euro zone inflation has been in what the ECB calls the "danger zone" of below 1 percent since October, raising concerns about deflation. The ECB wants to keep inflation below, but close to 2 percent.

The bank said last week that it was ready to launch unconventional policy measures to bring inflation higher, if price growth remained stuck at too low a level for too long.

Such unconventional measures could include purchases of government bonds and private assets in what is known as quantitative easing.

Asked when the ECB is likely to decide how it wants to respond to the low inflation, Nowotny said:

"My personal expectation is that it will be in the first meeting of June of this year when we have to discuss this again in detail because then we will get the new data relevant."

He noted that economic growth in the euro zone might be higher than expected this year, which would help accelerate inflation and the ECB would do well to wait for data that would confirm or disprove that. (Reporting By Jan Strupczewski)

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