The Organization for Economic Cooperation and Development has warned that global inflation needs to be contained, giving special attention to price growth in the 17 countries that share the euro, according to The Wall Street Journal. On Tuesday, the group while the recovery is gaining strength, rising commodity prices are threatening to raise inflation expectations that could become entrenched. The OECD backed the European Central Banks recent strong language, The ECB is rightly concerned about inflation.
The push for tighter fiscal policy comes as the European Union reported that factory gate prices in the eurozone increase by 0.8% in February from the previous month, marking a 6.6% annual rate of inflation, which is the highest since September 2008. The increase comes as the ECB meets this week to decide monetary policy, and the meeting is widely expected to result in an increase of the main interest rate from the record low level of 1% in order to contain price gains.