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ECB’s Mueller says high inflation could force cut in stimulus – Metro US

ECB’s Mueller says high inflation could force cut in stimulus

FILE PHOTO: European Central Bank (ECB) headquarters building is seen
FILE PHOTO: European Central Bank (ECB) headquarters building is seen in Frankfurt

FRANKFURT (Reuters) – The European Central Bank can end emergency bond purchases next spring and needs to watch consumer prices as persistently high inflation could require a reduction of stimulus, Estonian central bank chief Madis Mueller said on Friday.

Largely repeating the ECB’s policy message from Thursday, Mueller said the bank’s focus should be on whether inflation leads to an acceleration of wage growth that could drive the pace of price increases above 2% in the longer term.

“If this were to happen, the central bank would not be able to continue its policy of large bond purchases and negative interest rates for long,” Mueller, a member of the ECB’s Governing Council, said in a blog post.

(Reporting by Tarmo Virki, writing by Balazs Koranyi; editing by John Stonestreet)

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