Deutsche Bank chief predicts that eurozone inflation will remain high

The head of Deutsche Bank, Christian Sewing, has warned that the eurozone's high inflation rate is not a temporary phenomenon, reported dpa.

"You have to think of it like a multi-story house: We have now reached a higher floor, and that is where we will stay for now," he told the Frankfurter Allgemeine Zeitung's Sunday edition.

It was now up to Europe's central banks, he said to the newspaper, to control the situation. "They have to find a way out of their very loose monetary policies, sooner rather than later," Sewing said.

Inflation rates in the eurozone have been on the rise for months, mainly due to surging energy prices.

In October, consumer prices rose by 4.1 per cent year-on-year, the highest level since 2008 and significantly above the European Central Bank's annual inflation target of 2 per cent.

In Germany, consumer prices even increased by 4.5 per cent compared with the same month last year, the highest level seen since 1993.

The ECB has so far continued to stick to its loose monetary policy, however, leaving its benchmark refinancing rate on hold at a historic low of 0 per cent.

ECB President Christine Lagarde has made it clear that the future of the pandemic emergency purchase programme (PEPP), which buys private and public sector securities, will not be decided until the meeting of the bank's Governing Council in December.

Deutsche Bank's Sewing also commented on the COP26 global climate summit scheduled to begin in Scotland on Sunday. "It is imperative that we develop standards that apply globally or are at least compatible so that a company does not have to serve different standards along its supply chain," he said.

He called for transitional regulations in the area of sustainability that set a framework but also leave companies a certain amount of flexibility. "We cannot decarbonize and deindustrialize at the same time, putting many millions of jobs at risk."