ECB Vice President Luis de Guindos said in a speech, “inflation is likely to remain elevated for longer than previously expected, but to decline in the course of this year.”
“That is the central case, but there are upside risks to that outlook,” he added. “Inflation could turn out to be higher if price pressures feed through into higher-than-anticipated wage rises, or if the economy returns to full capacity more quickly than foreseen.
“Some other central banks have either already raised rates or indicated that they will soon do so,” he said. “In making comparisons, it’s worth remembering that the euro area is at a different stage of the economic cycle, just as it was when the pandemic started. So it’s natural that central banks around the globe won’t necessarily start raising rates at the same time.”
