ECB’s Schnabel sees risk of higher inflation: report

FILE PHOTO: 29th Frankfurt European Banking Congress (EBC) takes place in Frankfurt
FILE PHOTO: Isabel Schnabel, member of the German advisory board of economic experts attends the 29th Frankfurt European Banking Congress (EBC) at the Old Opera house in Frankfurt, Germany November 22, 2019. REUTERS/Ralph Orlowski/File Photo

November 23, 2021

FRANKFURT (Reuters) – Euro zone inflation will be higher next year than previously thought and there is a risk that price growth could stay above the ECB’s target in the medium term, European Central Bank board member Isabel Schnabel told Bloomberg in an interview.

“The risks to inflation are skewed to the upside,” she said. “It’s plausible to assume that inflation is going to drop below our target of 2% in the medium term.

“However, there could be structural shifts pointing in the other direction,” Schnabel, the head of the ECB’s market operations, said. “I don’t think we can truly tell, on the basis of today’s data, what is actually going to happen.”

Schnabel added that plans to end pandemic emergency bond buys remain valid, despite a new wave of COVID-19.

(Reporting by Balazs Koranyi; Editing by Giles Elgood)