ECB rates may need to go higher than neutral, Wunsch says

08/30/2022

Less than a minute

2022.08.30 21:38

ECB rates may need to go higher than neutral, Wunsch says
FILE PHOTO: The European Central Bank (ECB) logo in Frankfurt, Germany, January 23, 2020. REUTERS/Ralph Orlowski

ALPBACH, Austria (Reuters) – The European Central Bank may need to raise interest rates to a level that starts to restrict economic activity or above what is considered the “neutral” rate, Belgian central bank chief Pierre Wunsch said on Tuesday.

“I think the consensus is we have to move quickly to a level that at some point … will be restrictive,” Wunsch told a conference.

“We are probably going to go for some kind of slowdown, maybe a technical recession, maybe even worse,” Wunsch said, adding that even this may not be enough to slow inflation and the ECB has to be beyond “normalisation.”

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08/30/2022

Less than a minute