The ECB plans to raise the interest rate by 0.50, why not higher?
2022.11.21 12:28
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The ECB plans to raise the interest rate by 0.50, why not higher?
Budrigannews.com – Policymaker Mario Centeno stated on Monday that the European Central Bank’s next interest rate increase could be less than the record 75 basis point hikes decided at its last two meetings.
The European Central Bank (ECB) has increased interest rates by 200 basis points in just three months from record lows while the inflation rate is in the double digits.
Centeno stated that the ECB had to stop the upward trend of inflation and could not allow it to become ingrained in the economy when he spoke at a conference in Lisbon.
Centeno responded, “Yes, I think the ECB should raise interest rates by less than 75 basis points.”I don’t like to talk about increases before meetings, but I think there are many things that could cause the rate increase to be lower than that.
His perspective appeared to match that of the bank’s chief economist, Philip Lane, who stated earlier on Monday in an interview that the ECB would raise interest rates once more in December and next year to combat inflation, though those increases may be smaller than the most recent ones.
Centeno cited the fact that “rates in Europe continue to be roughly half those in the United States” as a reliable indication of the disparity in economic fundamentals between the two regions.
“Could help the ECB a lot in combating inflation,” he added, urging moderation in wage increases and company margins.
