BERLIN – Inflation in the euro zone is unlikely to overshoot and the current increase in price growth driven by the coronavirus pandemic will be temporary, European Central Bank board member Isabel Schnabel was quoted on Saturday as saying.
“I am sure that we will not experience any excessively high inflation,” Schnabel told the Frankfurter Allgemeine Sonntagszeitung in extracts from an interview released ahead of publication.
Schnabel’s comments come a day after the accounts of the ECB‘s June policy meeting revealed growing concerns among conservative policymakers that the rise in inflation may be more durable than now predicted.
Commenting on the ECB‘s new, symmetric goal for inflation of 2%, Schnabel said: “On the one hand, the increase in the inflation target is minimal. On the other, the goal of 2% has an important function: It creates additional room for our monetary policy to have a stabilising effect.”
She added that interest rates would not remain low for ever and it was vital for European governments to ensure that the large amounts of stimulus spending they have deployed paves the way for a return to a sustainable growth path.
Schnabel’s comments on growth echoed her remarks a week ago to a conference in Germany.