MNI BRIEF:No Stagflation, But Upside Price Risk-ECB's Schnabel

The global and European economies are undergoing a process of reflation, not stagflation, ECB Executive Board member Isabel Schnabel said Wednesday, adding that concerns over an abrupt slowdown in the economic recovery under the impact of higher energy prices and supply chain disruptions are largely unwarranted.

Economies are better placed today to prevent a recurrence of the negative effects of the oil price shocks of the 1970s and 1980s, Schnabel said, but inflation will remain higher for longer than previously anticipated.

Policymakers need to avoid tightening of monetary policy prematurely in response to a temporary and possibly short-lived inflation spike, while remaining vigilant to the upside risks to inflation, she said.