The Bundesbank is preparing to stomach higher German inflation than it likes, above the European Central Bank’s target level, because of the euro zone crisis, a source at the central bank said on Thursday.
Although the Bundesbank still wants stable prices across the euro zone, its latest comments show the bank recognises that upward pressure on German wage costs and property prices suggest its inflation is likely to rise above the bloc’s average.
As this chart shows, historically the Bundesbank was quick to react to any signs of inflation:
The Bank of England voted on Thursday not to give the struggling economy another injection of cash as concerns over stubbornly high inflation outweighed the risk of a prolonged recession.
The number of Americans submitting new applications for jobless benefits edged down last week, easing concerns the labor market was deteriorating after April’s weak employment growth.