PARIS (MktNews) - Bank of France Governor Jean-Claude Trichet, a member of the European Central Bank's (ECB) Governing Council, repeated Friday that the ECB remains in a "wait and see" stance, monitoring possible knock-on effects of higher oil prices on eurozone wages.
According to the text of a speech prepared for the Swedish national Chamber of Commerce in Stockholm, Trichet again cited ECB President Wim Duisenberg's summary of the central bank's position after its March 29 meeting when it left interest rates unchanged. This is exactly same text released at the Franco-German economic summit on March 30.
The ECB "is carefully assessing whether and to what extent upward risks to price stability will continue to decline" in an international environment of "increased uncertainty," Duisenberg's summary said.
"Information from the first pillar shows that money growth has been on a downward trend since the spring of 2000, indicating that upward risks to price stability from the monetary side have receded. As for the second pillar, somewhat lower real GDP growth this year will contribute to a reduction in domestic upward price pressures," the summary said.
"On the other hand, owing to the risk of second-round effects from past oil price increases, wage developments need to be monitored carefully," the text concluded.