The eurozone economy is already at “a critical point where if we continue to raise interest rates we run the risk of something breaking,” said Giannis Stournaras
If we have a new source of uncertainty in the Middle East, where it is completely unknown what is going to happen – we are in the dark – it is better to keep all our options open and be careful to maintain the resilience of the European economy, he said a week before the meeting of ECB in Athens where it is expected to put a brake on interest rate increases after 15 months.
The eurozone economy is already at “a critical point where if we keep raising interest rates we run the risk of something breaking,” he said.
“There is a lot of progress in reducing inflation, we are almost at a standstill in terms of activity in the Eurozone and we have seen a reduction in bank lending”
Asked when he thought the ECB could start cutting interest rates, Stournaras said: “If inflation in the middle of next year… falls close to 3%, that’s probably the time to start thinking about a reduction of interest rates”.
Source :Skai
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