Nagel from ECB asks for patience in battling inflation

Joachim Nagel, Bundesbank President, recently spoke on a time period inflation battling might take. In his recent statement, he asked the public of Germany to be patient, as fighting inflation may take time, and rate hiking may need up to two years to go into full effect.

Nagel is known for his hawkish attitudes among the ECB officials and favoring higher rate levels. He underlined that the bank is actually fighting inflation, citing four subsequent hikes delivered over the year as the main evidence of that. But still, he noted that he doesn’t expect any significant inflation easing until 2024 despite the actions taken.

As it was stated by Nagel, this process requires patience.

It should be recalled that the ECB has hiked the rates by a combined 2.5 percentage points over the time period since July. That became the fastest pace of monetary tightening in the bank’s history. These measures were taken to curb inflation that reached 10% this autumn due to rapid growth of food, energy and services prices.

According to Nagel’s statement, the Bundesbank suggests slower inflation in December because of a decline in gas prices. At the same time, as it was pointed by him, inflation will remain at about 7% next year, while a significant easing of inflation might come in 2024.