Germany’s economic council on Wednesday warned that inflation could remain high for longer or even pick up again if financial market worries prevent central banks from raising interest rates.
“The recent increase in financial market risks has made it more difficult for central banks to fight inflation,” the five “wise ones” who advise Berlin on economic policy said in their biannual report.
“If the monetary policy response is too weak due to these trade-offs, inflation could remain high for longer than expected or even pick up again,” they added.
Source : German experts warn of inflation surge if banking woes prevent rate hikes