Love Pulse Posted July 10, 2021 Posted July 10, 2021 Link: Website! European Central Bank officials believe that inflation may exceed expectations in the coming years, which confirms the uncertainty about what could face the European economy despite its recovery from the repercussions of the Corona pandemic. The European Central Bank's projections indicate that inflation will reach 1.4% by 2023, the farthest it is currently forecasting. According to the June 9-10 Monetary Policy Meeting Minutes released Friday, "inflation was widely viewed as subject to upward risks". Although that rate is below the new inflation target of 2%, monetary policymakers have taken into account the impact of supply chain shortages and rising individual savings. The possibility of governments having to take measures to combat climate change, and the impact of this on rising prices, was also addressed as one of the reasons put forward during the meeting. Upside risk Monetary policy makers agreed to view the rise in inflation this year as temporary. Nevertheless, central bank governors, including Dutch central bank governor Klaas Knott, and Bundesbank president Jens Weidmann said in public comments that there are upside risks weighing on the current outlook. Officials at the meeting differed on whether the recovery in the economy justified the slowdown in the pace of bond purchases under the pandemic emergency purchase program. Some said that purchasing should be scaled back "within the consistency of the decision-making process". In the end, the ECB thought the outlook was too fragile, and decided to continue buying at an accelerated pace until September. Three weeks before the meeting, Christine Lagarde, president of the European Central Bank, said that looking at stopping the subsidies was "too early" and "not necessary at the moment."
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