The European Central Bank should stick to its stimulus programme even if headline inflation is falling below its forecasts, the chief economist of Germany's Bundesbank Jens Ulbrich has said.
A six-week fall in oil prices is keeping a lid on eurozone price growth, threatening ECB forecasts and raising questions about the effectiveness of its €60b-a-month quantitative easing programme, launched in March to revive inflation.
Jens Ulbrich, head of the Bundesbank's economics department, said the pace of price growth was falling behind schedule but the ECB should focus on a continued improvement in core inflation, which excludes energy and unprocessed food.
"The path of inflation is slightly lower than we have expected in the June forecast," Ulbrich said in an interview with Reuters. "This is mainly due to oil prices falling again. However, the core rate still points upwards."
The ECB expects headline inflation of 0.3pc this year, 1.5pc in 2016 and 1.8pc in 2017.
The European Central Bank (ECB) is keeping rates at a record low since the euro zone remains beset by Greece's debt problems.
Despite predictions that rates would rise slowly, mortgage holders should at least be prepared for the possibility that interest rates could rise faster than they might think.
Elsewhere this looks like happening very soon. In the US, the Federal Reserve has indicated it is more positive on the US economy, confirming views it is likely to raise rates in September.
The Fed said it had unanimously agreed to keep rates at close to zero this month, but believed the economy was on a stronger footing.
"Economic activity has been expanding moderately in recent months," it said in a statement. But it still did not give a clear indication of when rates would rise.
The Fed policy makers also said they expected inflation in the United States to rise gradually toward its 2pc target.
And the Bank of England's deputy governor for monetary policy has said it would be "foolish to pre-announce" a date for an interest rate increase.
On Thursday, the Bank's monetary policy committee voted to keep interest rates at their current historic low of 0.5pc.
Deputy governor Ben Broadbent said that the monetary policy committee had no specific time in mind for a rise and comments by BOE governor Mark Carney had been misinterpreted.
The cost of borrowing has remained unchanged for 78 months.
The ultra-low interest rate regime has boosted the housing market as homeowners enjoy record low mortgages rates, but penalised savers whose returns have dwindled to almost nothing.
Speaking the BBC, Mr Broadbent said: "We [the MPC] are responding to things that are essentially... unpredictable. And that means that it would not just be impossible, it would be foolish to pre-announce some fixed date of interest rate changes."
Mr Broadbent said he saw no "urgency" to increase interest rates at present.