AMSTERDAM (Reuters) - The impact of the European Central Bank’s 2.3 trillion asset purchase program on inflation has been disappointing, Dutch central bank chief Klaas Knot, a long-time critic of the bond buying scheme, said on Wednesday.
The purchases, aimed at lowering borrowing costs to stimulate growth and ultimately inflation, have taken longer to work than the bank has anticipated. But other ECB officials argue that the benefits are now clear.
“I think the effect (of asset buys) has been there in keeping the economic recovery going,” Knot told Dutch lawmakers. “But the effect on inflation has just been what you’d call disappointing, full stop,” Knot said.
“If you look at core inflation... then actually inflation has been flat for four years, flat as a pancake, and so you can barely observe any effect,” Knot said.
Reporting by Toby Sterling; Editing by Balazs Koranyi and Hugh Lawson