ECB may need to act if European inflation falls further - Draghi

JACKSON HOLE, Wyo Fri Aug 22, 2014 4:25pm EDT

JACKSON HOLE, Wyo Aug 22 (Reuters) - A further drop in European inflation would pose price stability risks and the European Central Bank would use "all the available instruments" in response, ECB President Mario Draghi said on Friday.

"The governing council will acknowledge these developments and within its mandate will use all the available instruments needed to ensure price stability over the medium term," Draghi said at a lunch event here at the Federal Reserve's annual symposium.

Draghi, however, said he thought the drop in European inflation was due to temporary factors such as energy prices and the crisis in Ukraine. (Reporting by Howard Schneider and Michael Flaherty; Editing by Paul Simao)

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