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MNI INTERVIEW: ECB At Risk Of Overtightening - Suedekum

(MNI) LONDON

Court ruling on government spending will lower German growth, inflation, economist Jens Suedekum says.

Increases in German wages will continue to outpace price rises for some time, leading German economist Jens Suedekum told MNI, though he added that eurozone inflation could fall more quickly than expected and that monetary policy risks being too tight.

German inflation ticked up 1.5 percentage points in December to 3.8% as a result of one-off base effects, but a recent decision by the country’s Constitutional Court to strike EUR60 billion from the federal budget is likely to contribute to a downward trend in price rises, he said in an interview.

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Increases in German wages will continue to outpace price rises for some time, leading German economist Jens Suedekum told MNI, though he added that eurozone inflation could fall more quickly than expected and that monetary policy risks being too tight.

German inflation ticked up 1.5 percentage points in December to 3.8% as a result of one-off base effects, but a recent decision by the country’s Constitutional Court to strike EUR60 billion from the federal budget is likely to contribute to a downward trend in price rises, he said in an interview.

Keep reading...Show less