MADRID (Reuters) – The European Central Bank (ECB) must continue raising interest rates to bring the inflation rate back to its 2% target, even though much of the monetary tightening has already been undertaken, a declared Thursday the vice-president of the emission institute, Luis de Guindos.
“A significant part of the journey has been made, there is still a long way to go, probably the road ahead is shorter but I don’t know where the end point will be,” he said during an event in Madrid.
The ECB has already reduced the pace of its rate hikes with a 25 basis point hike decided at the beginning of the month, but it has signaled that further hikes will come.
According to a Reuters survey of economists, the ECB is expected to raise interest rates by a quarter point at each of its next two meetings.
Luis de Guindos said Thursday he was still concerned about the evolution of core inflation, “which is particularly worrying in services”.
Inflation in the euro zone accelerated to 7% year on year last month after 6.9% in March, according to final data published on Wednesday.
While underlying price growth, closely watched by ECB officials in recent months, has slowed somewhat, the component for the services sector has continued to accelerate.
(Report Jesús Aguado and Emma Pinedo; Blandine Hénault for the , edited by Nicolas Delame)
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