Fiscal policy will increasingly be the main focus for investors in coming months, European Central Bank's vice president Luis de Guindos said at an event in Spain on Friday, noting that the central bank can’t yet declare victory over inflation yet although core prices points to a deceleration in the coming quarter.

Asked about the reform of the Stability and Growth Pact, de Guindos stressed that a new deal would “eliminate lots of uncertainty” as it would be better than a return to the old fiscal rules. (MNI POLICY: EU Fiscal Deal Taking Shape Before December ECOFIN)

The vice-president was optimistic about the possibilities of a deal and wished for the “common sense to prevail”, noting that the timings for a deal are now very tight.