ECB Sees Risks Shifting to Low Growth From High Inflation, Says De Guindos

By Paul Hannon

The European Central Bank is increasingly confident that inflation in the eurozone will fall back to its target, but also more concerned about the outlook for growth, Vice President Luis de Guindos said Wednesday.

The ECB cut its key interest rate four times between June and the end of last year, for a total of one percentage point. Investors expect to see further cuts in the first half of this year.

Speaking in his native Spain, de Guindos said that further cuts are likely, while warning that policymakers will have to remain "prudent" in the face of high levels of uncertainty about the economic outlook.

"We have made substantial progress in bringing inflation back to target," he said. "At the same time, the balance of macroeconomic risks has shifted from concerns about high inflation to concerns about low growth."

Write to Paul Hannon at [e-mail]

(END) Dow Jones Newswires

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