BERLIN, Nov 29 — The ECB believes that inflation peaked in November, meaning it would be premature to raise interest rates as price increases look likely to slow gradually next year, European Central Bank board member Isabel Schnabel said.

Inflation would trend back towards 2 per cent next year, she told ZDF television today, as supply bottlenecks and energy price growth level off. The current high figures reflected both supply bottlenecks and from a base effect resulting from prices being lower last year at the height of the pandemic.

"Most forecasts actually assume inflation will fall below 2 per cent, so there really are no signs of price rises getting out of control,” she said.

"If we thought inflation would permanently settle above 2 per cent, we would definitely react. However, at the moment, we see no indications of this,” she added. — Reuters