The European Central Bank (ECB) should consider raising interest rates by twice the expected rate next month if inflation prospects worsen, according to Gediminas Simkus, a board member. a bigger move for starters.
Simkus has joined forces with ECB counterpart Martin Kazaks to argue that the key scenario for a 0.25% increase in the July meeting – when policymakers are expected to raise borrowing costs for the first time here and a decade – should not be taken for granted as record inflation must be fought “decisively”.
“Of course we have to see some change in the data, some change from what we saw in early June,” Simkus said in an interview with Bloomberg.
“But if we see this change in the data indicating the persistence of inflation, the 50 basis points should be the key choice for July,” he added.
ECB President Christine Lagarde said in her speech that policymakers were ready to step up their action to tackle inflation, if justified, echoing the urgency of other central banks around the world that were more aggressive about interest rates.
“With these levels of inflation, and with inflation becoming more widespread, with wages rising in the eurozone, we need to move decisively towards normalizing monetary policy,” said Simkus, who heads the central bank. Bank of Lithuania.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
