German Bundesbank chief: High inflation will remain for some time

 

GERMANY – Despite some initial signs of easing, high inflation in the eurozone will likely remain high for some time, the head of Germany’s central bank said on Monday.

“I would like to believe that we will hopefully see better inflation figures,” German Bundesbank President Joachim Nagel said Monday, adding that reliable data suggested however that inflation rates would remain high for a while before they begin to drop.

Oil prices have fallen recently. The upward trend in prices for manufacturers in Germany appeared to weaken considerably in October, helping fuel hopes that high inflation could be declining.

But according to the central bank boss, the inflation rate in Germany will probably remain high for the coming year. Nagel said it was “likely” that inflation will average around 7%.

Nagel said high inflation is weighing on the entire eurozone.

“The massive upward pressure on prices is broad-based,” Nagel said. “It is putting a brake on consumer demand in particular.”

Nagel said the European Central Bank (ECB) would hike interest rates again in December in order to bring inflation down to 2% in the medium-term. Nagel helps decide monetary policy for the common currency as a member of the ECB’s Governing Council.