In the Eurozone, the first rate hike in the fight against high inflation may come earlier than previously thought. There are several signs from the ranks of the European Central Bank (ECB) that interest rates will be raised early in the summer. “I don’t see any reason why we shouldn’t end the asset purchase program in July,” ECB Vice President Luis de Guindos said in an interview with Bloomberg News published on Thursday.
From today’s perspective, a rate hike in July is also possible. Around the same time as de Guindos, European Central Bank Council member Pierre Wonche made a very similar statement. The Belgian central bank governor, in an interview with Bloomberg, said a rate hike in July is “certainly a scenario I would consider.” But the prerequisite is “another inflation surprise.”
The high level of inflation in the common currency area is likely to be the main reason for the summer interest rate hike signals. In March, the inflation rate rose to its highest level since the introduction of the euro, at 7.4 percent, according to revised data from Thursday. So inflation is well above the inflation target set by the European Central Bank. The central bank aims to achieve an inflation rate of 2% in the medium term.
On Wednesday, Bundesbank President Joachim Nagel said that the European Central Bank may raise interest rates as early as the summer in light of the high level of inflation.
Sylvia Plath writes for Social Post News, covering news, politics, business, technology, sport, entertainment, and lifestyle. She focuses on clear, reliable reporting and useful information, helping readers stay informed about current events, emerging trends, and stories that matter.
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