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Tightening euro-area monetary policy too soon would be a “big mistake,” Paolo Gentiloni, the European Union's economy commissioner, said in a Bloomberg Television interview.
“We are monitoring euro-area inflation -- we should monitor it very accurately -- but without making conclusions too soon,” Gentiloni said during the Ambrosetti Forum in Cernobbio, Italy. “I think it would be a big mistake, because the mainstream consensus is on the fact that this inflation is still a temporary phenomenon.”
With the virus pandemic far from over, policy makers in the euro area and the U.S. are weighing inflation risks against the need to sustain the economic recovery. The ECB is due to make its next policy decision on Thursday.
Read more: Stournaras Urges ECB Caution in Assessing Spike in Inflation
Gentiloni said Europe must avoid “mistakes” made during the financial crisis more than a decade ago of going “too soon back to normal.”
Euro-area consumer prices rose at an annual rate of 3% in August, the most in a decade and more than the ECB's 2% medium-term target.
European Central Bank Governing Council member Yannis Stournaras on Wednesday cautioned against overreacting to the spike in inflation.
Most estimates suggest the acceleration in price increases is due temporary supply-chain bottlenecks, according to Stournaras, who heads Greece's central bank.
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