FRANKFURT, (Reuters) – While Euro zone inflation may take longer than expected to return to its target, there has been no evidence to suggest that wages are being influenced by high prices.

The ECB is facing high inflation. They have little experience in dealing with price increases and this complicates a critical policy decision that will be made Dec. 16.

The ECB maintained that inflation was temporary, and that it will be under control on its own. However, a rising number of policymakers have expressed concern about a worse outcome, and the bank should reduce stimulus.

Although he largely echoed the ECB’s latest stance on inflation, de Guindos admitted that inflation risks were moderately high and that there would be a slower drop than originally thought.

According to de Guindos, “We are 100% convinced that the inflation rate will decline in the first half of next years.” He also stated that the inflation rate would begin to fall further during the second half next year. Then inflation will slow down even more to converge to our target of 2 %.

He said that while the convergence to the target of 2% may take some time, there is no doubt inflation will slow down in 2022.

The inflation rate soared to 4.9% in the last month. This is a record-breaking high and private forecasters are not expecting it to fall below the 2% goal of the ECB until late 2022.

De Guindos also downplayed the effect of high prices growth by arguing there is no evidence that wages are reacting to price pressures temporarily.

He said that wage growth was expected to rise faster in 2022 than it would in 2021. We must… remain vigilant in relation to wage growth and wage negotiation.

He said, “While supply chain disruptions and restrictions related to pandemics could impact growth in the short term,” these factors are unlikely to further affect it.

He stated that “I don’t think this will stop the euro region recovery.” “Growth factors will remain quite strong over the medium-term.”