German central bank governor believes inflation faces upside risks Reuters

© Reuters. File picture: File picture: Jens Weidmann, President of the Federal Bank of Germany, submitted the 2018 annual report in Frankfurt, Germany on February 27, 2019. REUTERS/Kai Pfaffenbach

FRANKFURT (Reuters)-German central bank governor Jens Weidmann said on Wednesday that as the European labor market tightens, workers will become increasingly able to demand higher wages, thereby increasing the risk of persistently high inflation.

“Company complaints about labor shortages have increased significantly, especially in Germany, but also in our European neighbors,” Weidmann said.

“In the future, this tension in the labor market may make it easier for employees and unions to push for significantly higher wages,” he said, warning that the upward risk of inflation dominates.

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