London, Thursday, 20 January 2022
According to sources from the ECB's December 2021 meeting, policymakers highlighted that the recent and predicted increase in inflation was mostly caused by transient causes that were expected to fade in 2022, but warned that a "higher for longer" inflation scenario should not be ruled out.
Inflation is expected to be very close to 2% in 2023 and 2024, but considering the upside possibilities, it might easily exceed 2%.
At the same time, the central bank stated that net purchases under the PEPP might be reduced and eventually phased out by the end of March, but that substantial monetary policy assistance was still required, indicating that an interest rate hike this year is quite improbable.
Source: European Central Bank
(Edited by: The Decision Maker)