LONDON (Reuters) - The European Central Bank is unwavering in its commitment to lifting inflation and could even provide more stimulus, its chief economist said on Monday, pushing back against criticism that its latest measures were unnecessary.
With growth and inflation both slowing, the ECB cut rates deeper into negative territory last week and said it would start an open-ended bond purchase program to depress already low borrowing costs.
But more than a third of the rate-setting Governing Council opposed the new asset buys, a rare disagreement for a collegial body that normally concludes big decisions with a broad consensus if not unanimity.
"The ECB's mandate for price stability is unconditional, and the Governing Council is unwavering in its commitment to achieve its inflation aim," ECB Chief Economist Philip Lane, who formally proposed the easing package, said in London.
"We judge that, if needed, we can further lower the deposit facility rate and, with it, the overnight money market rate," Lane added.
In a possible concession to policy hawks, the ECB decided last week to keep its criteria for bond purchases unchanged.
Lane indicated that the ECB was in no rush to revisit the issue, including a rule that prevents the ECB from owning more than third of a country's debt.
"Based on our projections on the size and evolution of the purchasable universe, we are confident that the envisaged purchase volumes will be consistent with the current parameters of the asset purchase program for an extended period of time," Lane told an event in London.
He also challenged criticism that an open-ended bond purchase scheme could keep the ECB in the market indefinitely, arguing that stimulus measures will push up inflation, which will in turn allow the ECB to exit the market.
"Both the net asset purchase horizon and the reinvestment horizon are linked to our interest rates. They will therefore adjust dynamically to changes in the inflation outlook," Lane said.
(Reporting By Marc Jones and Ritvik Carvalho; Writing by Francesco Canepa and Balazs Koranyi; Editing by Catherine Evans)