“Developments in the world economy and commodity markets have increased the downside risk in achieving the sustainable inflation path towards 2%; the risk has increased”, he told reports, according to Reuters.

“The governing council will closely monitor all incoming information”, he said.

Analysts said that Mr Praet’s comments suggest the ECB will cut its forecast for inflation when it meets next week, and raise the chances that the central bank will at some point ramp up its quantitative easing program.

Mr. Praet said that the path of commodity prices as well as a widening output gap in emerging markets influenced his assessment.

The Frankfurt-based European Central Bank is now buying 60 billion euros ($69 billion) a month of public-sector and corporate bonds and asset-backed securities under its quantitative-easing program, which is meant to run until September 2016.

Mr Praet, who is also the ECB’s chief economist, said the bank’s commitment to doing this should not be underestimated. “The (asset-buying programme) provides sufficient flexibility to do so in terms of size, composition and length of the programme”. The theme at the event, where attendees include Fed Vice Chairman Stanley Fischer and Bank of England Governor Mark Carney, is inflation and monetary policy. Credit to companies, arguably the most important driver for long-term recovery, grew by 0.9 percent from 0.2 percent in June and lending growth to households picked up to 1.9 percent from 1.7 percent, data showed on Thursday. The new staff forecast will serve as the basis of discussion, Praet said. European shares declined on Wednesday, with the Stoxx Europe 600 Index falling for a fifth time in six days.

Downbeat central bank comments are adding to market support with rate hike expectations in the U.S. and the United Kingdom being pushed back and the increased possibility that the ECB will move further into QE.

“From a monetary policy perspective, we will have to think about the effect on the pricing of risk as markets will somehow incorporate this volatility behaviour into the pricing of risk and we have to understand what the consequences are on financial conditions in general”, he said.