According to the German Bundesbank chief Jens Weidman, the European Central Bank (ECB) is running the risk of keeping monetary policy too loose in the face of higher inflation. Mr. Weidman, who voted against additional monetary easing this month, said that he fears that in the absence of sound fiscal policy support, ECB would be left with easing policies when it is actually a time to hike rates. He called on the ECB policymakers to not to fear away from interest rate hikes. He reiterated his previous warnings that the monetary policy is falling short of lifting growth in the single currency union.

Mr. Weidman believes that the ECB should stick to its mandates. According to him, the real litmus test would come when it would be clear that the ECB needs to normalize policies considering the price outlook.

In recent times, ECB’s most influential and hawkish policymaker has increasingly become critical of the accommodative policies.