FRANKFURT (Reuters) – The European Central Bank (ECB) must continue to raise interest rates, several members of its governing council said on Friday, reiterating the bank’s position after its meeting monetary policy due to the high level of inflation.
The ECB opted for a further interest rate hike on Thursday, taking the deposit rate to 3.50%, and its president Christine Lagarde said it was “very likely” that it would continue on this path in July.
For Bundesbank President Joachim Nagel, a rate hike next month could easily be followed by other measures.
“We still have a long way to go,” he said on Friday. “We may have to keep raising rates after the summer break.”
“Once we hit peak rates, we will stay there until we are certain of a safe and timely return of inflation to our 2% target,” Joachim Nagel added.
His Lithuanian counterpart, Gediminas Simkus, took a more nuanced view, saying further monetary policy tightening was needed, but the ECB was nearing the peak and it was too early to commit to the level. fall rates.
He also dismissed market expectations of rate cuts in early 2024, arguing that such a rapid change in policy would be confusing.
Finally Robert Holzmann, the governor of the National Bank of Austria, also considering that it is too early to make conjectures after July, declared that the level of underlying inflation will be at the heart of the debates.
“If things continue as they have done so far, i.e. underlying inflation stubbornly high, this leads to a clear conclusion: there will probably be a need for a top-up (on rates) “, he said.
(Balazs Koranyi, Andrius Sytas and Terje Solsvik, François Murphy in Vienna, Laetitia Volga, edited by Blandine Hénault)
Copyright © 2023 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.