Article content
The European Central Bank may need to increase borrowing costs by more than 100 basis points before it hits the terminal rate, according to Governing Council member Robert Holzmann.
Article content
“Some hope that the peak rate will be below 4%, but I fear it will go above 4%,” Holzmann told Austrian public broadcaster ORF in an interview aired Saturday. “I am expecting a few more hikes.”
The ECB earlier this week went ahead with a planned half-point move, raising the deposit rate to 3%. Yet it offered few clues on what may follow amid market turmoil that roiled Credit Suisse Group AG.
“The peak rate depends on how stubborn inflation is,” Holzmann said. Core inflation is “very, very high,” he said. “This means we have to be more persistent than we all would like.”
Article content
The comments by Holzmann, who heads Austria’s central bank, comments are in line with fellow hawkish policymakers, who came out in force on Friday to restate the case for lifting rates further.
Speaking in a separate Kauppalehti interview published Saturday, Olli Rehn said inflation in the euro area remains too fast and does not appear to be easing enough. The Finnish Governing Council member reiterated the ECB’s commitment to “do what is needed to stabilize inflation at the 2% target.”
Fresh ECB forecasts published Thursday showed inflation slowing more than previously thought this year, alongside stronger underlying price gains that exclude volatile items like food and energy.
Meanwhile, Pierre Wunsch of Belgium reiterated the central bank’s meeting-by-meeting approach.
“If we match the baseline scenario of our projections, we still have a long way to go,” he told L’Echo newspaper. “We will have to see, in the coming days, what the impact of what is happening in the United States and with Credit Suisse will be. The base case is that the situation will stabilize and have no impact on the financial markets.”
—With assistance from Kati Pohjanpalo and Lyubov Pronina.
(Updates with Rehn, Wunsch starting in sixth paragraph)
Stay connected with us on social media platform for instant update click here to join our Twitter, & Facebook
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.