The risk of new inflation jolts means that the European Central Bank has to stay flexible on interest rates, according to Executive Board member Isabel Schnabel. “We could be threatened by new price shocks,” Schnabel said at an awards ceremony in Kiel, Germany, on Sunday. “That’s why we are on alert and haven’t precommitted to a fixed rate path, but are staying data dependent.” The ECB lowered borrowing costs earlier this month, and while officials signaled that it won’t be the only cut, they haven’t offered much guidance on how quickly rates might drop. Most have highlighted lingering inflation risks and argued for ... (full story)