Underlying inflation in the euro zone is proving sticky and the recent fall in energy costs may not pull it down as fast as some expect, European Central Bank board member Isabel Schnabel said on Wednesday, highlighting the bank's chief concern.
Overall inflation in the 20 nations sharing the euro currency is falling quickly but core prices, which exclude volatile fuel and food costs, is still rising, suggesting rapid price growth could prove durable and difficult to break.
"My suspicion is that it is not the case, that it may not drop out as quickly as it moves in," Schnabel told a National Association for Business Economics conference. Schnabel said the ECB has some flexibility in reaching its 2% target and did not want to create needless pain by acting too quickly.
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