The Eurozone is facing levels of inflation that have not been seen for many years.
Further interest rate hikes in the euro zone will berequired“After that already expected at the end of October to fight against soaring inflation, said Saturday the President of the Bundesbank. “In my view, further interest rate hikes will be needed in order to bring inflation back to (on target) 2% in the medium term, and not just at the monetary policy meeting at the end of October.“, declared Joachim Nagel according to the text of a speech delivered in Washington and broadcast by the Bundesbank in Germany.
“In any case, the Governing Council of the ECB should not relax too soonits monetary tightening, he said. “‘Cause we need to make sure the high inflation stops“, he insisted. The rate reached 10% in September in the euro zone.
Another increase of 0.75 points
The ECB started in July to tighten its rates abruptly, faithful to its main mission which consists in guaranteeing price stability. It believes that the ongoing economic slowdown in the euro zone amid the energy crisis linked to the war in Ukraine will not be able to dampen inflation sufficiently.
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The next meeting of the institution’s board of governors, scheduled for October 27, could lead to a further 0.75 point rise in key rates, as in September, according to statements by eurozone bankers and observers.