Further rate hikes depend on economic data, reiterates ECB deputy

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The vice president of the European Central Bank (ECB), Luis de Guindos, reiterated this Monday (19) that the institution’s next interest rate hikes will depend on economic data. Since July, the ECB has raised its key interest rates by 1.25 percentage points in a bid to contain record inflation in the euro zone.

Guindos, who spoke during an event organized by Banco Sabadell, in Madrid, also reaffirmed the need for inflation expectations to be well anchored.

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He also commented that the economic slowdown that the eurozone is facing, as a result of the energy crisis triggered by Russia’s war in Ukraine, will not be enough to reduce inflation in the bloc.

balance reduction

The ECB vice president also said on Monday that the institution had not yet discussed when or how to reduce its balance sheet. He also stated that there were still no discussions about what the exact level of the neutral interest rate would be.

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He added that the ECB will do whatever is necessary to bring eurozone inflation back to the official target of 2%.

In August, the bloc’s annual consumer inflation rate (CPI) reached a record level of 9.1%.

Source: CNN Brasil

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