ECB Executive Board member Isabel Schnabel warned in a speech on Saturday, “monetary policy, for its part, cannot afford to look through energy price increases if they pose a risk to medium-term price stability.”
“This could be the case if prospects of persistently rising energy prices contribute to a deanchoring of inflation expectations, or if underlying price pressures threaten to lift inflation above our 2% target as rising carbon prices and the associated shifts in economic activity boost rather than suppress growth, employment and aggregate demand over the medium term.”
