The European Central Bank’s (ECB) decision to keep interest rates at record lows for even longer to boost sluggish inflation threatens monetary stability in the 19-member euro zone, a German business group said on Monday. The ECB said last month it would not hike borrowing costs until it sees inflation reach its 2% target by the mid-point of its forecast horizon, which currently stretches to 2023 and is extended by one year every December. “The rising inflation rates are a troubling warning signal,” said Wolfgang Steiger, Secretary-General of the CDU Wirtschaftsrat, a business group of 12,000 members that is close to Chancellor Angela Merkel’s Christian Democrats (CDU). German consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 3.1% in July, a 13-year high, compared with 2.1% in June.
Published in The Express Tribune, August 3rd, 2021.
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