The President of the European Central Bank Christine Lagarde on Wednesday opened the possibility of a first increase in the key rates of the ECB this summer, if inflation persists at a high level.
The mission of the European Central Bank is price stability, recalled Ms. Lagarde Wednesday Hamburg after a meeting with the mayor of the port city, Peter Tschentscher.
Eurozone inflation hit a record 7.5% year on year in March, well above the medium-term target of 2%, putting pressure on the institution to tighten monetary screw after years of very accommodative policy.
The journey of monetary normalization has already begun, according to Ms. Lagarde.
After stopping the emergency program in March intended to support the economy during the crisis caused by Covid-19, another, older debt buyback scheme will in turn end: We are going to stop net purchases of active with a high probability at the beginning of the third quarter, probably in July, said the former French minister.
The decision would be taken by the Board of Governors on the basis of economic data available at its June meeting.
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And then it will be time to look at interest rates, she added.
If a rate hike – the first since 2011 – were to quickly follow the end of asset purchases, the timing would allow that to be decided at the last monetary policy meeting before the summer break, set for July 21.
In the sequence planned by the ECB, a rate hike is supposed to occur some time after the end of the debt purchases.