A member of the Governing Council of the European Central Bank (ECB) Robert Holzmann said that the development of the inflation in 2021 surprised the policymakers. There are divergent views in Governing Council on upside risks to inflation, he added.
Holzmann also said that if the ECB declared that it no longer needed bond purchases since it expects inflation to be close to or above the 2 percent target in 2023-2024, it would be a strong signal that a rise in interest rates is likely over the next two quarters.
The policymaker also noted that in an extreme scenario, interest rates could be increased in 2022.