ECB can live with small inflation undershoot; bigger one unlikely, Schnabel says

The European Central Bank can tolerate small deviations from its inflation target and next year's expected undershooting is not likely to be the start of a longer period of weak price growth, ECB board member Isabel Schnabel said on Wednesday.

"My narrative is one of an economy that is recovering, with a closing output gap, expecting a significant fiscal impulse, which stimulates the economy," Schnabel told a BNP Paribas conference.

"And all of that is not an economy that produces disinflationary pressures," Schnabel said. "If anything, it goes in the other direction."