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Money ECB Director Beak provides for inflation upward risks

11:15  23 november  2021
11:15  23 november  2021 Source:   finanzen.net

ECB warns financial markets in front of exuberance in pandemic recovery

 ECB warns financial markets in front of exuberance in pandemic recovery (Bloomberg) - the European Central Bank (ECB) warns of risks for financial stability in the eurozone because of the increasingly excessive prices on real estate and financial markets, the risk-taking of non-banks and Increased borrowing.

(Bloomberg) - Isabel Schnabel, Directorate member of the European Central Bank (ECB), sees increasing inflation. The fact that a resurface of the coronavirus could hinder the upswing in the eurozone, beak keeps beak in a detailed interview with Bloomberg News for less likely.

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"It is plausible to assume that inflation will fall within 2% in the medium term. However, the risks for inflation are rather upwards, "said beak. "The uncertainty about pace and extent of the decline has increased" and "We must take into account these increased uncertainty."

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Price Pressure © Bloomberg Price Pressure

Schnabel's designs grasp increasing concerns about inflation, which, according to the Bundesbank in Germany might increase to almost 6%. Meanwhile, the 4th wave of the Corona Pandemic Chancellor Angela Merkel has caused to tailor stricter restrictions on public life.

complete transcript of the interview with Isabel Schnabel

European Central Bank President Christine Lagarde And Financial Leaders at Banking Congress © Bloomberg European Central Bank President Christine Lagarde and Financial Leaders at Banking Congress

"In recent times, we observe an increase in Covid-19 infections and some curtancing measures in parts of the euro area," said beak . "This is likely to affect the activity at short notice, especially in the contact-intensive service sector. But I do not believe that this will bring the general upswing out of the kick. "

inflation climbs: 4.5 percent in October

 inflation climbs: 4.5 percent in October Rising energy prices and the VAT effect have further fueled the inflation in Germany in October. © Fabian Sommer / DPA View of the petrol columns at a Berlin gas station. consumer prices were 4.5 percent above the level of the same period of the previous year, as the Federal Statistical Office has calculated. An inflation rate at this level had last determined the Wiesbaden Statisticians just 28 years ago: in October 1993. There was a higher inflation rate in August 1993 with 4.6 percent.

Against the background of such a secure economic situation, the ECB council members should try to preserve a certain range of room for maneuver at their meeting on 16 December, they added. The meeting is considered crucial for the future of the bond purchases of the ECB after the expiry of 1.85 trillion euros heavy pandemic emergency program in March.

"In times of great uncertainty, it is extremely important to preserve a degree of optionality," said beak. "I would not bind me about a long period of time. That would be a mistake. "

The net purchases under the Pandemic Program (PepP) are expected to end in March, reiterated beak. She expressed skeptically about the future role of bond purchases in the arsenal of the ECB, even if they recognized the positive impacts they had so far.

"There is on the one hand decreasing income from the purchase of assets and on the other hand increasing side effects," she said. "Therefore, there will be a shift from the purchases of assets to other instruments, especially to our Forward Guidance."

Inflation in Turkey much worse than expected, the collapse of the book in question!

 Inflation in Turkey much worse than expected, the collapse of the book in question! © Pixabay Inflation in Turkey much worse than expected, the collapse of the book in question! At the highest for three years, inflation is four times higher than government forecasts. Inflation continues to jump in Turkey. The increase in consumer prices reached 21.31% year-on-year in November in Turkey (+ 1.5 points compared to October), after the Turkish pound tumble, according to official figures published on Friday.

Flexibility Debate

A central dispute among the ECB council members was the question of whether the exceptional flexibility of the emergency program can be transferred to the regular instruments when the Pepp expires. Schnabel said it was essential to maintain a certain flexibility first. "Especially in this transitional phase is important," she said. "The coronavirus crisis is not a black and white thing. The exit from the pandemic will be a process. "

The ECB could, for example, transfer the flexibility to its regular purchase program, or create a new facility that would serve as hedge. Beak to understand that the Pepp could still play a role after March.

"It is important to acknowledge the crucial role of this flexibility," she said. "The Pep will not disappear if the net purchase of assets are reduced to zero. Sometimes talking about the end of the Pepp. The Pep will not leak in March. The net purchases of assets maybe, but not the Pep as such. "

on the question of whether you were interested to take over the top of the Bundesbank when President Jens Weidmann excretes in December, Schnabel said, she did not want speculation and focus on the upcoming important decision of the ECB.

ALEX BRUMMER: Fateful signals from America as US inflation soars

  ALEX BRUMMER: Fateful signals from America as US inflation soars Federal Reserve chairman Jay Powell (pictured) has begun a reverse ferret by rolling back $150bn (£89bn) a month of quantitative easing. © Provided by This Is Money ( When Bank of England Governor Andrew Bailey casts his eye across the Atlantic he will be thinking: 'There but for the grace of God...'.There is a core difference between what has been going on across the Atlantic and here. The US creation of broad money over the past couple of years has been far faster than in Britain., and would have the high priest of monetarism, Milton Friedman, spinning in his grave.

Headline in the original:

ECB's Schnabel Sees Inflation Risks As 'Skewed to the upside'

(New: Versions for Pep in the last four paragraphs)

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