BERLIN — The European Central Bank must quickly raise interest rates in line with the United States, given high inflation in the euro zone, the head of Germany’s Ifo institute told the Augsburger Allgemeine newspaper.
“The US interest rate hike leads to an appreciation of the US dollar against the euro, which increases inflationary pressure in Europe,” Ifo head Clemens Fuest said, according to an advance copy of the newspaper, published on Friday. “In this respect, there is some pressure for the ECB to follow.”
While in the United States, economic policy affects inflation more than in Europe, where energy prices play a greater role, “that does not change the fact that the ECB also has to act,” said Fuest. (Writing by Dorothee Babeck and Miranda Murray ; Editing by William Mallard)