Immigration can affect inflation and, in turn, monetary policy in two opposing ways. And the jury’s still out as to its overall impact on the eurozone. There are two main channels through which immigration potentially can affect inflation: a) through labour supply and wages; and b) through additional demand for goods and services. Obviously, immigration increases the labour supply, which could put downward pressure on wages. This impact on wages depends on the skill composition of immigrants and whether they really match the required skills in sectors with high vacancy rates. At the same time,…