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European Central Bank policymakers are reassessing their commitment to extra stimulus, reflecting rising doubts about how quickly inflation will fall as the Omicron coronavirus variant fuels worries of further price rises.
A trio of recent events has sown doubts in the minds of some rate-setters at the ECB, which has been forecasting for months that inflation would fall back below its target and justify the continuation of vast stimulus policies.
The first was the surge in eurozone inflation to 4.9 per cent in November, well above the ECB’s 2 per cent target and a record since the euro was created two decades ago. It was followed by the new variant, which threatens to worsen supply chain bottlenecks that have pushed up prices.
Last week, the US Federal Reserve said it would accelerate the ending of its bond-buying programme to tackle inflation, putting pressure on the ECB to rein in its…
