PARIS (MNI) – The “temporary” acceleration in Eurozone inflation
due to costlier commodities should reverse next year, but the European
Central Bank must remain on guard against any spillover to wages and
other prices, ECB Governing Council member Christian Noyer said
Thursday.
“I think everyone foresees the return below 2% by the end of next
year,” the governor of the Bank of France said in a radio interview.”
“But we will not tolerate spillover effects,” he insisted
repeatedly. “We must absolutely avoid what we call second-round
effects.”
“That’s the reason we sent a … a very clear signal” via the rate
hike in April to say “we don’t want any spillover effects.”
Such effects “would oblige us to react,” Noyer warned.
Inflation should “come back down by itself if everything goes
well,” he said. “For the moment, expectations are well anchored.”
–Paris Newsroom, +331 4271 5540; stephen@marketnews.com
[TOPICS: M$X$$$,M$$EC$,MGX$$$,M$F$$$]
