ECB’s Inflation Radar Complicates Efforts to Bolster Growth

Inflation is back on the European Central Bank’s radar, complicating efforts to bolster growth as the sovereign debt crisis pushes the economy toward recession.

The ECB will lift its 2012 inflation forecast above the 2 percent price-stability threshold today, limiting its ability to cut interest rates further even as it lowers the outlook for growth, economists said. Policy makers in Frankfurt will keep the benchmark rate at a record low of 1 percent, 55 of 58 economists in a Bloomberg News survey predict. The decision is due at 1:45 p.m. and ECB President Mario Draghi will unveil the bank’s new economic projections at a 2:30 p.m. press conference.