Tokyo (Bloomberg) European Central Bank Governing Council member Patrick Honohan said he sees a "stronger tone" to the European economy and has no immediate concern about inflationary pressure.
"There is a stronger tone to the numbers, suggesting that it was good news," Honohan told a group of reporters in Tokyo today, referring to second-quarter gross domestic product in Europe.
"There is every indication that inflation expectations are steady, are not moving around, and the projection of actual inflation is still well within where we would like it to be."
Europe expanded 1 per cent last quarter, more than economists forecast, as the fastest growth in Germany in two decades powered the recovery.
Inflation in the region accelerated to the quickest in 20 months in July, potentially complicating the ECB's gradual withdrawal of stimulus measures.
Consumer prices in the 16 nations that use the euro increased 1.7 per cent in July from a year earlier, the most since November 2008. The central bank aims to keep annual price gains just below 2 per cent and President Jean-Claude Trichet said he will announce next month how the ECB will scale back its program of unlimited loans to banks that was implemented in 2008.
Media reports show ECB policy makers are divided on the risk posed by inflation. Governing Council member Athanasios Orphanides told Reuters in an interview published on August 9 that he's "not worried" about inflation driven by energy prices, while his colleague Guy Quaden told La Meuse newspaper that the ECB needs to be "more attentive about this issue."
