ECB to develop more flexible long-term strategy after inflation shock of previous years

According to the Bloomberg report, the European Central Bank (ECB) intends to change its monetary policy strategy to respond more effectively to inflationary shocks. The growing instability of the global environment creates additional reasons for that.

Members of the ECB Governing Council will discuss possible changes at an informal meeting on May 6-7 in Porto, Portugal, according to information obtained by the agency from insiders.

The sources said that the regulator's officials are set to examine the reports of two working groups set up to assess the situation, as well as the report of the Monetary Policy Committee. As noted by Bloomberg, by doing so, the European regulator is trying to adapt to the new environment in the global economy, characterized by more frequent shocks.

According to ECB representatives, including Executive Board member Isabel Schnabel, supply chain disruptions will occur more often in the future, as the world is moving to a more environmentally friendly and digital model of economy. At the same time, trade relations between nations are becoming increasingly strained. This highlights the need to adapt methods of analyzing GDP growth and inflation and to respond more flexibly to shocks.