A surge in eurozone inflation transformed this week’s meeting of the European Central Bank’s governing council from what was widely expected to be an unremarkable event into a turning point for the bloc’s monetary policy.
The shift towards a more “hawkish” stance came on the back of January’s record eurozone inflation figure, released shortly before the start of a two-day virtual meeting on Wednesday, according to five people involved.
The rise seemed to spook many of the ECB council members who had until recent days believed the surge in prices in the final six months of 2021 was “transitory” and would quickly fade this year, not least because the inflationary effects of Germany reversing its temporary sales tax cut would have dropped out of the data.
