ECB’s Rehn: No Longer-Term Upsurge in Inflation Without Second-Round Effects
17 December 2021
By David Barwick – FRANKFURT (Econostream) – Currently high inflation will not be a longer-term phenomenon in the absence of second-round effects on wages and prices, European Central Bank Governing Council member Olli Rehn said on Friday.
In a press release issued by the Bank of Finland, which he heads, Rehn said, ‘There is considerable uncertainty about the path which inflation will take, and I’m well aware that rising inflation feeds through to our everyday lives.’
‘The factors that have been driving inflation this year will not themselves lead to a longer-term upsurge in inflation, unless they are accompanied by second-round effects and a wage-price spiral’, he continued.
Getting the pandemic under control was ‘central both in terms of people’s health and for the economy’, he said.
The ECB’s decision yesterday to end pandemic emergency purchase programme (PEPP) net purchases as of next March reflects the recovery of growth and inflation, he said. Still, policy will stay accommodative to ensure the achievement of price stability, he said.