The President of the European Central Bank, Mario Draghi, has brushed aside suggestions the independence of central banks is under threat from a rising tide of popular anger over the impact of loose monetary policies.
At the Conservative party conference earlier this month Theresa May seemed to criticise the Bank of England’s low interest rates and money printing for exacerbating wealth inequalities.
And the ECB has been accused by senior German politicians for contributing to the rise of the rightwing Alternative for Germany party through its own negative interest rates.
In the United States, the Republican Presidential candidate Donald Trump has accused the Federal Reserve of creating a "false economy" and called on the central bank to raise interest rates.
At his regular monthly press conference Mr Draghi was asked about the criticism of Ms May and whether he felt threatened by it.
“No I don’t feel threatened – neither is the independence of the governing council threatened,” he said.
On the charge that money printing increases inequality Mr Draghi cited a report from the Bundesbank which shows that unemployment is the primary contributor to income inequality.
“So to the extent that monetary policy is effective [in reducing unemployment] it reduces inequality in the short-run," he said.
Mr Draghi did concede, however, that money printing by central banks lifts asset prices, which automatically tends to favour people who own more assets.
The ECB kept its main interest rates on hold and defied predictions from some in the financial markets that the central bank would announce a “taper” of its €80bn a month asset purchases.
Mr Draghi suggested the ECB would wait until December to decide whether to modify its asset purchase programme, which is currently due to end next March.
“Our decisions in December will tell you what we are going to do. That will define the monetary policy for the coming weeks and coming months,” he told journalists.
The ECB is widely expected, ultimately, to extend its money printing beyond March.
Mr Draghi said that an “abrupt end to bond purchases is unlikely”.
“Overall, it is clear that Mr Draghi did not want to pre-empt the outcome of the next meeting, but his dovish commentary suggests the ECB is likely to extend QE in December in our view,” said Nick Kounis of ABN Amro.
“We continue to think that the ECB will expand the duration of its QE programme from March 2017 currently to September 2017 in December.”
The latest statistics show that eurozone inflation was 0.4 per cent in September, up from 0.2 per cent in August but still well below the ECB’s target of just below 2 per cent.
