Tue, 22 Feb 2011 11:58:00 +0100

ECB's Mersch joins Smaghi's hawkish talk

FXstreet.com (Barcelona) - Last Friday, Lorenzo Bini smaghi, a member of the ECB's Executive Board said that inflationary pressures might drive the ECB to hike rates. Now, his colleague, Yves Mersch, Governor from the Banque centrale du Luxembourg, is reported by Bloomberg to have said that "excessively low interest rates can distort economy."

This would lead the ECB to: Reassess risks to economic outlook," Mersch is quoted as saying. The first step the European Central Bank would take, Mersch concludes: "probably make exit statement at next meeting."