A recession in the euro zone is now highly likely, but that alone will not reduce inflation and the European Central Bank should opt for a big rate hike next month, ECB policymaker Martins Kazaks said on Saturday, according to with reuters.
The ECB raised interest rates by 50 basis points in July to zero, and a similar move has been priced in for September 8, but some policymakers have begun to talk of an even bigger hike as the inflation outlook worsens.
“A front-loaded rate hike is a sensible policy choice,” Kazaks, head of Latvia’s central bank, told Reuters. “We should be open to discussing both 50 and 75 basis points as possible moves.
“From the current perspective, it should be at least 50,” Kazaks said in an interview on the sidelines of the Federal Reserve’s Jackson Hole Economic Symposium.
Source: Capital
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