Euro-zone inflation is showing a half-year lag to that of Lithuania, meaning the peak is yet to come, European Central Bank Governing Council Gediminas Simkus told the Financial Times.
(Bloomberg) — Euro-zone inflation is showing a half-year lag to that of Lithuania, meaning the peak is yet to come, European Central Bank Governing Council Gediminas Simkus told the Financial Times.
“It resembles what we experienced,” the country’s central-bank chief was cited as saying. The “peak of headline inflation in the euro is probably just around the corner.”
Simkus reckons the eventual impact of such price pressures is still in the pipeline, the FT reported.
“The pass-through of these energy impulses into final goods and services is still to be seen,” he said. “That is exactly what worries me.”
Quoted in the same article, his Latvian colleague Martins Kazaks said that soaring euro-area inflation “is not a passing shock” but rather “a permanent shift, which requires structural solutions” including an ambitious European Union energy strategy.
“If we are unable to ensure that our economies get access to affordable energy, we will start losing companies that are energy intensive and they will relocate and that will have consequences in terms of unemployment and lower growth,” the FT cited him as saying.
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