The European Central Bank (ECB) will likely need to raise interest rates further to contain persistent inflation, said the two main “hawks” members of the Board of Trustees. ECB this Saturday, downplaying the risk of a repeat of the 2008 financial crisis.
The comments from the Austrian and Belgian central bankers back up remarks by two fellow hawks – their Slovakian and Lithuanian counterparts – made a day earlier and push for rate hikes to tame inflation currently at 8 .5% in euro zone.
O ECB raised interest rates, as promised, by 50 basis points last Thursday, remaining firm in its fight against inflation and facing calls from some investors to delay the tightening policy until the turmoil in the banking sector decrease.
Robert Holzmann of Austria and Pierre Wunsch of Belgium said more action was likely to be needed.
“Inflation is proving to be much tougher than previously thought,” Holzmann told Austria’s ORF 1 radio. “I expect more interest rate hikes.” He added that the extent of future highs would depend on the data.
Since July last year, the ECB already raised rates by 350 basis points, raising its benchmark refinancing rate to 3.5% on Thursday.
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