HELSINKI (Reuters) – The action of the European Central Bank (ECB) in the fight against inflation is sufficient for the moment but further increases in interest rates cannot be ruled out, Tuomas Valimaki, member of the ECB, said on Tuesday. board of governors of the Bank of Finland.

Since July 2022, the ECB has increased its rates during each of its monetary policy meetings but a pause is expected during the meeting on October 26 and the debate seems open between officials of the Frankfurt institute on the end or not of the current cycle of monetary tightening.

“Key rates have reached levels which, if maintained for a sufficiently long period, will contribute substantially to the rapid return of inflation towards our objective,” said Tuomas Valimaki, comments in line with the ECB press release. from last month.

“However, given the risks regarding the trajectory of inflation, this does not necessarily mean that there will be no more interest rate hikes,” added Tuomas Valimaki, who replaces the governor of the Bank of Finland, Olli Rehn, now a candidate for the country’s presidency.

Inflation in the euro zone fell to 4.3% in September, compared to 5.2% the previous month, a larger drop than expected.

However, it should stabilize next year and remain around 3% for a large part of 2024, mainly due to the elimination of public aid to households. The main question is therefore whether the slowdown in price increases can resume in 2025 to the point that inflation falls to 2% by the end of this year.

“We will assess the inflation outlook in light of underlying inflation dynamics and the strength of monetary policy transmission,” Tuomas Valimaki said.

(Report by Anne Kauranen, written by Balazs Koranyi, by Claude Chendjou, edited by Blandine Hénault)

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