Prices have risen sharply in the euro area.
(Photo: dpa)
Berlin The Bundesbank sees the ECB under pressure to act in view of the high inflation. “We cannot like the current strong increase in the general price level,” emphasized board member Johannes Beermann on Wednesday.
It is important to prevent inflation from consolidating: “This is where the monetary policy of the Eurosystem is primarily required.”
Bundesbank boss Joachim Nagel had previously said that the figures speak their own language, with inflation in mind, which has exceeded the ECB’s target by far. The first interest rate hike can be expected at the beginning of the third quarter, i.e. in July.
Overall, the upward trend in prices has widened, Beermann warned. The core rate – i.e. excluding energy and food – has risen significantly: “In the euro area it is above two percent for the first time since December 2002. Overall, the inflation rate should therefore be significantly higher in 2022 than previously expected.”
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According to the ECB projection published in March, the experts at the European Central Bank (ECB) anticipate an average inflation rate of 5.1 percent in the euro area for the current year in their baseline scenario. For the next two years, they predict a decline close to the central bank’s target of 2.0 percent.
“However, the latest inflation figures have again surprised upwards, so that the forecasts from March are probably already outdated,” emphasized Beermann with a view to the record high inflation rate in the euro area of 7.4 percent in the previous month.
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