MNI BRIEF: Schnabel - Upside Infl Risk, PEPP Reinvests Go On

Net purchases under the ECB's PEPP programme should end in March next year, Executive Board member Isabel Schnabel said in an interview Tuesday, but PEPP itself will not, with flexible reinvestments possibly mitigating the need to transfer PEPP flexibility to APP.

Short-run growth is likely to slow as a result of continued supply-side disruptions and the resurgence of the coronavirus, Schabel said, but the medium-term growth outlook continues to look strong. December's Eurosystem staff inflation projections are expected to be revised upwards, but, overall, inflation will decline over the forecast horizon.

"It's plausible to assume that inflation is going to drop below our target of 2% in the medium term. However, the risks to inflation are skewed to the upside," she said. Schnabel did not say whether she would consider succeeding Jens Weidmann as Bundesbank president when asked by reporters.