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Speech by Isabel Schnabel, member of the ECB’s executive board

  • Maintaining flexibility during the transition period is essential
  • Inflation risks are on the rise
  • The pace and magnitude of the decline in inflation is increasingly difficult to determine
  • Inflation may fall below the 2% target in the medium term

She also adds that a return of additional restrictions on viruses could hamper economic activity in the short term. What is not said is that as the restrictions are reinstated, this will also put more strain on supply and capacity constraints and, in turn, will also lead to higher cost pressures on the road. Ripple effect a lot.

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