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German institutes see inflation risk from ECB bond plan

FRANKFURT, Oct 10 (Reuters) - The European Central Bank's bond-buying programme could lead to higher inflation by undermining confidence in its ability anchor prices, a newspaper reported Germany's leading economic institutes as saying in their autumn report.

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

"As a result, citizens and financial markets actors could lose trust in the ECB's capacity to take care of price stability in the long run," the Frankfurter Allgemeine Zeitung quoted the institutes as saying in their report, due for release on Thursday.

(Writing by Paul Carrel)

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

Keywords: ECB/GERMANY INFLATION