Eurozone: Rate hikes could slow in 2023, says Makhlouf

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DUBLIN (Reuters) – The European Central Bank (ECB) is likely to raise interest rates in small increments next year if further hikes are needed, Governing Council member Gabriel Makhlouf said on Sunday.

The ECB started raising rates in July at the fastest pace on record and markets are betting on a 50-75 basis point increase at the next meeting on December 15.

A Reuters survey predicts a limited 50 basis point rise in ECB rates in December after a 200 basis point rise since July.

Gabriel Makhlouf, Governor of the Central Bank of Ireland, said on Thursday he was “open” to a 50 or 75 basis point hike in ECB interest rates next month.

Although adamant about raising rates to curb inflation, the members of the ECB’s Governing Council are not entirely in agreement on the pace to apply, the minutes of their last meeting show.

“When we get into next year, it’s likely that if rates go up, they will go up in small increments,” said Gabriel Makhlouf, quoted in the Irish newspaper Sunday Independent.

“Then we’ll have to see what’s happening in the eurozone economy – so we can judge what more we need to do. And how fast we need to do it.”

“I think by the second half of next year we will see it (inflation) come down,” he added.

(Report Padraic Halpin; French version Kate Entringer)

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