European Central Bank (ECB) policymakers are still some way apart on their new inflation strategy but hope to reach an agreement before debating the future of their pandemic-fighting programme in September, sources told Reuters.
ECB rate setters agreed on some side issues at a retreat last weekend, such as including environmental considerations into their policy decisions and adding owner-occupied housing costs to their measure of inflation, the three sources close to the matter said.
But there were still some differences when it came to the core of the ECB’s strategy review: the definition of price stability and how to achieve it, the sources added.
One source said there was general consensus at the June 18-20 gathering that the ECB could tolerate inflation exceeding its new goal, to be set at 2%, as it has been stuck below that level for most of the past decade.
But the source said policymakers had yet to agree on how to phrase that message and how specific it should be about the extent to which inflation would be allowed to overshoot and for how long.