ECB’s Schnabel: Eurozone underlying inflation proving sticky

According to Isabel Schnabel, ECB board member, the Eurozone’s underlying inflation is proving stubborn, increasing concerns that excruciatingly high price growth may become more enduring.

Schnabel, on Wednesday, claimed that while a widening of corporate profit margins is also a primary cause of inflation, rapid nominal wage increases may be a symptom of second round inflation impacts.

In general, Schnabel said at a conference of the National Society for Business Economics, “I think the message is that core inflation is proving to be much stickier than headline inflation.”

Schnabel argued that quick nominal wage growth may be a sign of second round inflation effects while a widening of corporate profit margins is also a major driver of inflation.

“In general, I think the message is that core inflation is proving to be much stickier than headline inflation,” Schnabel added.