ECB President Christine Lagarde repeated today, “we continue to view this upswing as being largely driven by temporary factors. The impact of these factors should fade out of annual rates of price changes in the course of next year, dampening annual inflation.”
“So far, there is no evidence of significant second-round effects through wages and inflation expectations in the euro area remain anchored, but we continue to monitor risks to the inflation outlook carefully,” she added.
On the other hand, Governing Council Member Olli Rehn said, “due to persistent production bottlenecks, it is possible that an increase in energy prices has a longer-lasting impact on consumer price. We analyze this development carefully at the Governing Council and at the Bank of Finland.” He noted that medium-term inflation expectations have increased to around 1.9%, which is in line with the European Central Bank’s strategy.
