He reiterated his desire for an early rate hike.
(Photo: dpa)
Frankfurt Because of the high inflation, Bundesbank President Joachim Nagel expects the moderate wage policy in Germany, which has been in place for around ten years, to come to an end. “That time is over now,” said Nagel on Monday at a conference of the Austrian central bank. You will probably see high numbers in Germany in the second half of the year in collective bargaining.
But it’s also no surprise that the unions are demanding higher wages and salaries in view of inflation, which has currently risen to 7.4 percent, explained Nagel. Nevertheless, this does not necessarily have to lead to a wage-price spiral.
ECB President Christine Lagarde promised an end to the era of negative interest rates in the euro area on Monday. Nagel described Lagarde’s statements as the right step to reduce uncertainty.
It is extremely important to give the financial markets a clear orientation. If inflation were as high as it is at the moment, central banks would have to withdraw monetary policy support from the economy and – as in the euro zone – raise interest rates, Nagel said at the central bank event.
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Nagel had recently stated that after the European Central Bank’s first interest rate hike in July, he believed that further hikes in the euro area could quickly follow. “It is clear that negative interest rates are a thing of the past,” Nagel said on Friday at the end of the meeting of finance ministers and central bank governors of the seven leading industrialized countries (G7) on Petersberg near Bonn.
More: Lagarde announces the end of negative interest rates in September