ECB's Tumpel Gugerell said inflation is still too high and that she already sees "the first signs of second-round effects". The executive board member warned that it is "very difficult and expensive to tame inflation once it has gone out of control. She also said that the bank should not react to "short-term developments" to prop up the economy, but added that the ECB will continue to supply money markets with liquidity "as necessary" to facilitate lending between banks. The comments come in a German newspaper a day after the IG Metall's regional offices called for wage demands of 8%. They highlight that the ECB is unwilling to cut rates to boost the economy.
