The inflation rate in the euro zone is still likely to remain higher for longer, and economic growth is still expected to be around potential this year, European Central Bank Governing Council Member Nout Wellink told Market News International Monday. Wellink is also President of the Dutch central bank. "We stick to what we said after the (governing council) meeting in mid-December: higher (rate) than we would like to see and coming back a little bit later, than we had expected until recently, to the level that is acceptable to us," Wellink said on the sidelines of meetings at the Bank for International Settlements. He was referring to remarks made following the Dec. 6 policy meeting.
Wellink said that the ECB won't accept the emergence of second-round price effects, or the spillover of higher prices for oil, commodities and food into wages and general consumer prices. It's "crucial" this is avoided in Germany and some other countries, he added. "I think that the monetary authorities have made clear that they will not accept such a development," he said, when asked if second-round effects are inevitable.