Fuel prices increased by 29.6 percent compared to January 2021, Statistics Austria announced in a broadcast on Tuesday. Household energy became more expensive by 16.4 percent. In restaurants and hotels, an average of 6.3 percent more had to be paid. Food and non-alcoholic beverages cost an average of 4.9 percent more. According to Statistics Austria, inflation would have been 1.8 percent year-on-year in January without increases in transport, housing and food prices.
The price level of the micro-shopping basket, which represents daily shopping, rose by 4.1 percent year-on-year. The mini shopping basket, which reflects a weekly purchase and also contains fuel, increased in price by 8.8 percent.
OeNB Governor Holzmann this year for two rate hikes
Oesterreichische Nationalbank (OeNB) Governor and ECB Council member Robert Holzmann can opt for two interest rate hikes in 2022 an interview with the “NZZ” published on Wednesday. “I would like two rate hikes by the end of this year or early next year,” added the central banker. “Some of my colleagues would perhaps be even more progressive here, while others would be more reserved.”
Roughly speaking, 1.5 percent would be the guide value for where key interest rates would have to move. “Only when this value is reached would our interest rate policy no longer be expansive but neutral,” said Holzmann. “We should clearly communicate that to the market participants.” When this value should be reached depends on how stubborn the inflation is. “However, I think that a base rate of roughly 1.5 percent in 2024 could be realistic, although that can certainly be shifted forward or backward a little,” said the council member.
Inflation rate in euro zone at five percent
The inflation rate in the euro zone is currently around 5 percent and thus well above the target of two percent, while a zero interest rate policy is still being pursued. Holzmann assumes that the ECB will have to reassess the situation in March. “A faster phasing out of all bond purchases and the question of interest rate increases this year are certainly up for discussion,” said Holzmann.
ECB President Christine Lagarde recently spoke out against an abrupt change of direction. She stressed that rate hikes would only come after the bond purchases ended. Holzmann contradicted this view and told the “NZZ” that the ECB could deviate from this and also raise interest rates before the purchases ended. The first increase could come in the summer and thus before the end of the purchases. A second rate hike could then come at the end of 2022: “I would favor that,” he added.
Source: Nachrichten
