Weidmann: German consumer prices to surpass the ECB target this year

Germany’s consumer prices could overshoot the European Central Bank’s (ECB) target by the end of this year, courtesy of a hike in taxes, the ECB Governing Council member and Bundesbank President Jens Weidmann said Friday.

Key quotes

“Reduced value-added tax (VAT) that expired at the end of last year and a tax on greenhouse gas emissions that went into effect on Jan. 1.”

“From today’s perspective, the (EU) harmonized consumer price index in Germany should rise to above 3% until the end of the year,”

“One thing is clear: the inflation rate will not remain as low as last year permanently.”

Market reaction

EUR/USD is little changed on the above comments, as it keeps its range around 1.2125, as of writing.