In an interview to El País – a Spanish-language daily newspaper – the European Central Bank (ECB) Chief Economist, Philip Lane, was noted saying that the current period of inflation is very unusual and temporary.
Key quotes:
- Inflation is unexpectedly high at the moment but it's not a sign of a chronic situation.
- We believe there are strong reasons for inflation to fall next year.
- Supply bottlenecks will largely be fixed next year.
- Energy demand forecasts have also fallen short due to the rapid pace of recovery.
- These headaches are not going to eliminate the basic dynamism of recovery.
- Will ensure that Europe has a strong recovery and that it is not derailed by an unnecessary adjustment of financing costs.
Market reaction
The headlines did little to influence the shared currency, or provide any impetus to the EUR/USD pair, which extended its sideways consolidative price action about mid-1.1500s.
