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The ECB assures that it will insist on raising interest rates

The ECB assures that it will insist on raising interest rates

However, the rest of the components showed an increase: in fact, the core inflation– which excludes energy and food values- rose from 5% to 5.2%. Inflation accumulated in the last measurement two months of deceleration, which boosted the European markets that reached their highest level since May.

the portuguese mario rye He warned, in this sense, that prices “are too high.” “How will we respond to this problem? We need answer with a monetary policy that has no alternative but to continue with the normalization process and increase interest rates”Centeno said as president of the portuguese central bank to congressmen from that country, according to the Bloomberg agency.

In the same line of RyeElizabeth Schnabel, member of the executive board of the ECB Germanysaid that inflation barely returned to single digits and that rates need more rises.

The deposit rate is currently at 2%a level considered neutral, that is, it does not encourage either the expansion or the cooling of the economy.

“Rates need to rise significantly and without pause to reach levels that are sufficiently restrictive and thus ensure a return to our inflation target of 2%,” said Schnabel.

Although both consider that they have to continue the increases, Centeno clarified that they should not persist for much longer. “We believe that we are nearing the end of the rate hike process,” he said.

With a tougher position, the member of the Governing Council, Robert Holzman -representative of the Central Bank of Austria– He minimized the moderation of inflation in December and maintained that said data will not change the policy of raising interest rates. “As long as core inflation does not fall, the change in the general index will not change our determination“, said Holzmann, known for being part of the “hawks” of the body.

For his part, François Villeroy de Galhau, of the Bank of France, called for the ECB to be “pragmatic”. “For the summer we need to arrive what specialists call terminal rate which is the rate that will allow us to lower inflation to 2%,” he said, without specifying what the next rate increases will be like.

Despite the aggressive policy of the ECBthe bloc’s economy is resisting the attacks of the organism and the consequences of the war between Russia and Ukraine in a better way than anticipated.

In the same vein, the chief economist of the European Central Bank (ECB), Philip Lanewho warned this Saturday that the price pressures in the twenty countries of the Eurozone are still high, despite the moderation of inflation and, in particular, of energy prices in the monetary bloc. He also highlighted that, despite their level, the interest rates imposed by the monetary entity are not enough to get closer to the 2% inflation target.

The bank’s economists Goldman Sachs modified their forecasts this week, and now they no longer expect a recession in the Eurozone.

The fall in gas prices on the continent – thanks to a warmer than expected winter – and the end of the health restrictions in china helped this change in perspectives.

the bank now expects an expansion of the Gross Domestic Product of the Eurozone of 0.6% for this yearinstead of a contraction of 0.1%, said a group of economists led by Jari Stehn.

Similarly, they are bullish on inflation: they say prices will slow faster than expected. reaching 3.25% per year by the end of this year.

“We also hope that the core inflation slows down thanks to a cooling in the prices of goods, although there will be upward pressure on services due to increases in labor costs,” Goldman Sachs detailed.

Similarly, he anticipates that the ECB “will significantly tighten its policy in the coming months“, given the resilience of the European economy and the persistence of the core index.

Within this framework, Goldman Sachs anticipated that the Frankfort-based bank will raise 50 points in its rates at its next meetings in February and Marchwith a last upward modification of 25 points in Maythus leaving the deposit rate at 3.25%.

The vice president of the ECB, Luis de Guindos, had commented in mid-December that he believed that increases of 50 basis points would become normal in the short term.

Source: Ambito

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