FRANKFURT (Reuters) – The European Central Bank must be “attentive” and “vigilant” with regard to inflation as a lingering price shock could seep into underlying price growth via wages, ECB Vice President Luis de Guindos said on Wednesday.
De Guindos said that inflation expectations remain anchored but if industrial bottlenecks last longer than now expected and energy prices continue to rise, inflation could exceed projections and put pressure on wages.
“We have to attentive, we have to be very vigilant, we have to avoid as much as possible these second round effects,” de Guindos told a news conference. “It’s very important to avoid this wage-price spiral.”
(Reporting by Balazs Koranyi; Editing by Toby Chopra)
