ECB Execs Admit Core Inflation Push Might Trigger Further Rate Increases – Bitcoin News

European Central Bank (ECB) officials have conceded that further interest rate hikes could be on the horizon, as core inflationary pressures remain high in the eurozone.

Central Bankers Concede Further Rate Hikes May Be Needed Despite Inflationary Pressures

Two members of the ECB’s Governing Council have spoken out about the current inflation outlook in the euro area, with both suggesting that further rate rises may be required in the near future, according to Bloomberg.

Croatian National Bank Governor Boris Vujčić said that the most aggressive part of the cycle of rate increases is almost over, but admitted that if core inflation remains above 4%, more hikes may still be on the cards. He explained that while consumer-price gains have been easing, underlying pressures, excluding volatile items like food and energy, remain high.

Speaking at the same event in Croatia, his colleague on the Council, Boštjan Vasle, revealed that services prices are increasingly moving away from the ECB’s 2% target. He stated:

Core inflation is clearly on an upward trend.

Vasle, who is the governor of Bank of Slovenia, added that further monetary tightening is likely required, warning that earlier shocks may not have fully passed through the system yet.

Other ECB representatives have recently suggested that the end of the euro zone’s most aggressive period of rate increases is in sight. Bank of France Governor Francois Villeroy de Galhau hinted recently that “we may possibly still have a little way to go.” Meanwhile, the head of Austria’s central bank, Robert Holzmann, suggested that another half-point step remains “on the cards.”

In March, the ECB raised the deposit rate from 2.5% to 3%, even against the backdrop of a deepening crisis with Switzerland’s banking giant Credit Suisse. The Bank will announce its next decision on the rates in May. Despite the current uncertainty, ECB executives believe further action is necessary to bring inflation back under control.

What do you think the ECB’s next move will be? Share your thoughts in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.