NICOSIA, Oct 18 (Reuters) – The eurozone economy could slide into recession but rate hikes are still needed as persistently high inflation hurts the economy and stability, Eurozone Governor Gabriel Makhlouf said on Tuesday. the Central Bank of Ireland and a member of the Governing Council of the European Central Bank (ECB).
“The eurozone faces the difficult combination of high inflation and low economic growth, and even a possible technical recession,” he noted at an event in Cyprus.
“History tells us that these problems will only get worse if we don’t act, and that higher interest rates are absolutely necessary as persistent inflation undermines macroeconomic stability,” he said. he adds.
Money markets are currently pricing in a 75 basis point rate hike from the ECB at its October 27 meeting. (Report Balazs Koranyi; French version Claude Chendjou, edited by Sophie Louet)