ECB’s Knot: Fighting Inflation Both an Economic and a Social Objective
17 January 2024
By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Klaas Knot on Wednesday said that there was both an economic and a social side to reducing inflation.
In a panel discussion during the Annual Meeting of the World Economic Forum in Davos, Switzerland, Knot, who heads De Nederlandsche Bank, said that ‘getting inflation down as quickly as possible so that rates need to stay high for a period as short as possible, for me that’s the social objective, it’s not only an economic objective.’
High inflation had a particular strong impact in low-income people who did not have many consumption choices and ‘simply have to take the prices as they come’, he said.
For this reason, inflation was one of the biggest ‘income in-equalisers’ of society, he said, and central banks were acting to control it. ‘[T]hat’s why I believe in the work we are doing as central bankers’, he said.