ECB cannot react to short-term impacts says Issing

European Central Bank chief economist Otmar Issing said in a speech in Berlin on Thursday 25 November that the ECB cannot change interest rates in response to the short-term impact of external developments, such as this year's sharp rise in oil prices.

"Monetary policy is powerless to deal with the short-term impact of exogenous shocks" such as the oil price rise or increases in indirect taxes, Issing said in a speech.

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