Rehn Sees No Second-Round Inflation, Backs Joint Debt for Defence Capabilities

European Central Bank policymaker Olli Rehn expressed confidence in the euro zone's economic stability, stating that there are no clear signs of second-round inflation effects. Speaking at an event in London on September 17, Rehn mentioned the labor market as one area to watch closely. He noted that the tightness seen in 2022 after the Ukraine invasion and post-COVID crisis is not currently evident.

Rehn emphasized the ECB's ability to monitor the 'political scenery' in Europe, particularly ahead of upcoming elections in countries like France next year. The central bank has a toolbox of 'viable instruments' to ensure smooth transmission of monetary policy, according to Rehn.