European Central Bank board member Sabine Lautenschlaeger has said the ECB should raise interest rates before the end of the year if euro zone inflation establishes itself at the ECB's target level. In an interview with German Deutschlandfunk radio to be aired on Sunday, Lautenschlaeger urged patience to see if inflation remained at the ECB's target of just under 2 percent.
Euro zone consumer prices were up by an annual 1.8 percent in January, the highest rate since February 2013, according to a Eurostat estimate, after 1.1 percent in December. "Has inflation returned just because we've had one month of that kind of inflation?" Lautenschlaeger said.
"I'm very pleased to say, quite honestly, that we're close to our target of just under 2 percent. But what's important for me is that it's not a temporary, ephemeral outlier on the upside. "For January, we don't yet know for sure. For December, it was largely due to energy prices and the so-called basis effect ... and, hold onto your hats, due to holidays booked by German tourists.
"So it's really important to ascertain that there is a trend, that the inflation has really returned," she added. "So let's wait a few months so that we can be sure ... "If inflation rates continue as they were in January, then I would not want to wait until next year."