Fabio Panetta, governor of the Bank of Italy and member of the ECB's Executive Board, has cautioned that upward risks to inflation continue to coexist with downward risks to economic growth.
The remarks underscore the delicate balancing act facing the European Central Bank as it navigates a complex macroeconomic landscape.
Panetta's comments, reported by Bloomberg News, signal that the Governing Council remains divided on the path forward.
Panetta's comments, reported by Bloomberg News, signal that the Governing Council remains divided on the path forward.
While inflationary pressures have eased from their peaks, they have not disappeared, particularly in services and energy.
Simultaneously, the eurozone economy is showing signs of fragility, with growth prospects dimming amid high borrowing costs and external headwinds.
This dual-risk scenario complicates the ECB's monetary policy decisions.