However, the ECB wants to have first ended its net debt purchase program, which had supported the economy during the crisis caused by Covid-19.
European Central Bank (ECB) President Christine Lagarde sees a “high probabilitythat the institution raise its key rates by the end of the year if inflation remains high, she said on Friday in an interview with the channel CNBC.
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“We look at the inflation numbers. (…) If the situation continues, as we think today, there is a good chance that rates will be raised by the end of the year“, she pointed out. Central banks around the world have largely started to raise their key rates, in an attempt to curb inflation which has been exacerbated by the war in Ukraine. The Frankfurt institution has so far refused to do so and is under pressure to also initiate the movement.
However, the ECB wants to have first ended its net debt purchase program, which had supported the economy during the crisis caused by Covid-19. The deadline for this program has been set for the third quarter, and Ms. Lagarde clarified on Friday that there were “strong chance“to get it done”earlyin the third trimester. Thursday, she had assured that the moment would depend on economic indicators, responding to the vice-president of the institution Luis de Guindos, who had mentioned the month of July.
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In the eurozone, inflation hit a record 7.5% in March, well above the ECB’s medium-term target of 2%. In the sequence planned by the ECB, a rate hike – the first since 2011 – is supposed to take place “After some time» the end of debt purchases.