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ECB's Trichet Says Second-Round Inflation Effects Must Be Avoided |
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European Economy |
Written by CEP News |
May 08 08 13:15 GMT |
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(CEP News) Frankfurt - In the press conference following the European Central Bank's rate announcement, ECB President Jean-Claude Trichet said that it was essential that second-round inflation effects from rising food and energy prices are avoided and that there were risks that wage indexing could lead to inflationary pressures.
Trichet stressed that wages must take productivity into account and that it was imperative that during wage negotiations, all parties meet their responsibilities. However, Trichet added that the ECB "will monitor all developments." Trichet also noted in his speech the high capacity utilization in the euro zone and said that tight labour markets could contribute to inflation. By Todd Wailoo,
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, edited by Nancy Girgis,
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