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Tuesday, February 27, 2024

European Central Bank. Eurozone interest rates. Announcement by Klaas Fudge

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The European Central Bank (ECB) will raise interest rates by 50 basis points in February and March, Klaas Knot, member of the ECB’s governing board, announced. He added that in the coming months the bank will continue to tighten monetary policy.

In an interview with the Dutch broadcaster WNL, Knot said that for now, no end can be expected interest rate increases. “The next steps will take place in May and June,” he said.

About interest rates euro area he also spoke in another interview with the Italian daily La Stampa. The publication was also published on Sunday. “It’s too early to say whether the ECB can slow down the pace of rate hikes until the summer,” he said.

According to the representative of the ECB, the moment when the risks associated with inflation “become more subdued” will be the one in which increases can be smaller. – Then we could slow down slightly, e.g. from 50 to 25 basis points. But we are still a long way from that point, he said.

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Eurozone interest rates

The Governing Council of the European Central Bank raised the rate in December refinancing operations, lending and deposit facilities by 50 basis points to 2.50 per cent, 2.75 per cent and 2.00 per cent, respectively. In October, the ECB raised interest rates by 75 basis points.

Also, announcements by ECB president Christine Lagarde show that this is not the end of the interest rate hike cycle. – At this point, we assess that we will have to raise interest rates significantly. It is quite clear that, based on the data we have at the moment, strong growth at a steady rate means we should expect interest rate hikes of 50 basis points for some time to come, Lagarde said.

Main photo source: Shutterstock



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