Oil price continues to pose inflation threat, warns ECB’s Trichet

The global economy was set for dynamic growth next year but central bankers must remain vigilant as oil prices still threatened to fuel inflation, Jean-Claude Trichet, the president of the European Central Bank (ECB), said yesterday.

In comments likely to increase speculation about another interest rate hike in the euro zone next month, Trichet said the world’s top bankers believed there was “no room for complacency” on inflation despite recent falls in the oil price.
“We have noted the decrease of oil prices in line with what a number of experts were predicting but we consider that we still have a risk there. Of course the oil price could increase again. Also… there are a number of indications that past oil price increases and past commodity price increases are still in the pipeline and did not entirely materialise already in consumer prices.”

Business Report