FRANKFURT (Reuters) -The European Central Bank is comfortable with the current level of interest rates and considers any inflation dip below 2% to be temporary, Luis de Guindos, the bank’s Vice President said on Thursday.

Inflation, hovering just above the ECB’s 2% target for most of this year, is projected to dip below that level next year and some policymakers fear this could shift inflation expectations, entrenching ultra-low levels, much like in the pre-pandemic decade.

“If (undershooting) happens, it will be something that is going to be temporary,” de Guindos told a Natixis CIB webinar. “We can be comfortable with the present level interest rates,” he said.

“I think that convergence to 2% without any overshooting or undershooting is now the main baseline scenario for projections,”

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