Pablo Hernández de Cos, a leading candidate to succeed Christine Lagarde as president of the European Central Bank, emphasized the need for continued vigilance on inflation risks. In an interview with Swiss newspaper Tagesanzeiger published Saturday, de Cos highlighted concerns over high energy prices potentially triggering so-called second-round effects.
Second-round effects occur when companies and workers raise prices and wage demands in response to rising energy costs. De Cos noted that such effects have not yet materialized, but policymakers must remain attentive to the possibility.
The remarks come as de Cos is one of two candidates vying to replace Lagarde at the helm of the ECB. His comments underscore the ongoing focus on inflation management amid global economic uncertainties.