Inflation Drivers in Europe Becoming More Structural, ECB’s Guindos Says

(Bloomberg) -- The factors stoking inflation in Europe are becoming more structural and simultaneously affecting economic growth, according to European Central Bank Vice President Luis de Guindos.

While supply bottlenecks and higher energy costs are transitory by nature, inflation hasn’t eased as much as the ECB had projected, Guindos said late Tuesday in a speech in Madrid. The situation is also leading to greater uncertainty in making economic predictions, he said.

“The European Central Bank is continuously pointing out that the inflation rebound in recent months is of a transitory nature,” Guindos said. “However, we have also seen how in recent months these supply factors are becoming more structural, more permanent.”

The remarks chime with recent comments by other ECB officials on the risks from the current bout of elevated consumer-price growth -- even as a new wave of Covid-19 sweeps across the continent.

Guindos said he’s confident Europe’s economy will continue its healthy growth path, despite the surge in infections.

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