ECB Governing Council member Bostjan Vasle warned that “there are early signs that in parts of the economy and certain regions, the risk regarding the labour market could become more material.”
“In some parts of the economy, labour is in short supply and if this trend will continue, or spread to other sectors, it could pose a risk to inflation,” he said said. “That’s why I think we should be very careful about second round effects.”
He also said if the trends of economic recovery continue, ” then in next March it will be appropriate to end PEPP, as announced when the programme was implemented.” But he emphasized, “even when we decide to end it, we’ll continue to provide plenty of liquidity to the economy with our other instruments.”
