Wires

German institutes see inflation risk from ECB bond plan

FRANKFURT, Oct 10 (Reuters) - The European Central Bank'sbond-buying programme could lead to higher inflation byundermining confidence in its ability anchor prices, a newspaperreported Germany's leading economic institutes as saying intheir autumn report.

The ECB unveiled its controversial new bond-purchase plan -dubbed "Outright Monetary Transactions", or OMT - last month andthe institutes saw any large scale purchases as a medium-terminflation risk.

"As a result, citizens and financial markets actors couldlose trust in the ECB's capacity to take care of price stabilityin the long run," the Frankfurter Allgemeine Zeitung quoted theinstitutes as saying in their report, due for release onThursday.

(Writing by Paul Carrel)

((paul.carrel@thomsonreuters.com)(+49 69 7565 1313))

Keywords: ECB/GERMANY INFLATION