FRANKFURT Reuters - The European Central Bank is facing a call to stop the practice of holding closed-door meetings with the private sector after ECB chief Economist Philip Lane reportedly disclosed an unpublished inflation forecast at one such event.
The Financial Times reported on Thursday that Lane disclosed in a private meeting with German economists that the ECB expects to hit its inflation target by 2025 - information that was not in the public domain and could be used to make inferences about the future path of interest rates.
The newspaper's report was partly disputed by the ECB, the central bank for 19 countries who share the Euro currency.
Christine Lagarde, a prominent member of the European Parliament, told Reuters he would request in a letter to the ECB President that such meetings be stopped.
The ECB has to end the practice of exclusive meetings with the private sector where it is not transparent what they said, Giegold told Reuters.
An ECB spokesperson did not comment on Giegold's remarks.
The yields of the euro zone government bond yield rose and the euro rebounded after the FT report was published and did not reverse the move after the partial denial. GVD EUR The FT said Lane had told the audience that the ECB's medium-term reference scenario showed inflation rebounding to 2% soon after the end of its three-year forecast period. The ECB disputed the details of the report, which it called inaccurate, and the FT's conclusion that euro zone interest rates could be raised in 2023
He didn't say in any conversation with analysts that the euro area will soon reach inflation after the end of the ECB projection horizon, an ECB spokesperson said in a written statement early Friday.
When asked about the date mentioned by the paper, the spokesperson did not comment.
Giegold, the Greens' coordinator on the European Parliament committee which oversees the ECB, said the confusion showed the ECB's public communication approach was miserably failed. You don't know whether to believe the newspaper or the ECB's human message, the German politician said.
This approach has entirely failed and the ECB must change its strategy. He said that the ECB should either end such meetings altogether or publish recordings to avoid confusion.
The ECB increased its economic forecasts last week, when it also reduced the pace of its pandemic emergency bond purchases. It now sees inflation of 2.2% this year, 1.7% next year and 1.5% in 2023.
The Central Bank has pledged not to raise rates until it sees inflation reaching 2% well before the end of its forecast horizon, typically between two and three years. If rates were to increase in three years from now, then money markets would get a price hike.
Earlier this year, Lane was forced to suspend one-on-one meeting with investors immediately following policy meetings due in part to public criticism of such engagements. But he has still been meeting with groups of economists.
Lagarde defended online www.ecb.gov at the time when President Lagarde was defending http://www.ecb.gov.uk. pdf exchanging views with representatives of the financial sector, including investors because they help to transmit the central bank's policy to the economy.