FRANKFURT (Reuters) – The euro zone inflation surge is still mostly temporary but households and firms would start to lift their price expectations if it lasted much longer, European Central Bank policymaker Olli Rehn said on Tuesday.
“If this state of elevated inflation were to last much longer, it would likely have a more significant effect on inflation expectations,” Rehn, the Finnish central bank governor, said in a speech.
“Indeed, the selling price expectations, three months forward, of both the industrial and the retail sectors have started to rise amid these temporary price pressures,” Rehn, the Finnish central bank chief, said.
He added that “some” components of this temporary inflation is proving to be more persistent than once thought.
(Reporting by Balazs Koranyi and Francesco Canepa)
