European Central Bank Chief Economist Peter Praet warned in an interview with German newspaper Boersen-Zeitung that lower oil prices increasingly risk de-anchoring inflation expectations, indicating that quantitative easing is becoming more likely.
The euro-area could see “negative inflation during a substantial part of 2015” amid a slide in the cost of crude, and the Governing Council “cannot simply look through” that, Praet said in comments published.
“Inflation expectations are extremely fragile” and “the risk of second-round effects seems to be greater today than it was in the past,” he said.
