MADRID (Archyde.com) – The European Central Bank (ECB) will continue to raise interest rates until inflation returns to the medium-term target of around 2% despite the risk of recession in the euro zone, it said on Wednesday. the vice-president of the Frankfurt institute.
Luis de Guindos did not specify the extent of the rate hike expected in December but said it would depend on the ECB’s future projections and November inflation figures.
“I can tell you that our approach will always be the same, we will continue to raise interest rates to a level that allows us to ensure that inflation converges towards our definition of price stability,” he said. said at a conference on finance Madrid.
Since July, the ECB has raised its rates by a total of 200 basis points, raising the deposit rate from -0.5% to 1.5%.
While the consumer price index in the euro zone came out in October at 10.6% on an annual basis, Luis de Guindos declared that inflation would remain around 10% in the months to come. According to him, the persistence of inflationary pressures should not be underestimated.
“It is very important to look at the evolution of core inflation and possible second-round effects, as they will determine the monetary policy response,” he said.
The ECB Vice-President, however, expects inflation to slow in the first quarter of 2023 or the first half of 2023.
He also added that a deceleration of the economy or a recession alone would not be enough to curb inflation.
(Reporting by Jess Aguado and Emma Pinedo; French version by Claude Chendjou, dit by Kate Entringer)
