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ECB Vice President: Rate hike unlikely in July | Financial

With the comments, the vice president of the central bank is fueling the discussion about when the ECB will raise its key interest rate. Recently, De Guindos also became involved in the public debate about this. Then he also mentioned July. Now he seems to nuance his words from then.

The purchase program is expected to be phased out in July, paving the way for a first interest rate step. This will enable the ECB to respond to the soaring inflation. But when interest rates really go up will depend on the new economic forecasts that central bank policymakers discuss at their next meeting in June, according to De Guindos.

Due to the war in Ukraine and its consequences for the European economy, policymakers at the ECB are under great pressure to do something about high inflation. It is therefore clear that an interest rate hike cannot wait too long. Economists are already taking into account that interest rates will be adjusted twice and possibly even three times this year.

The last time interest rates in the eurozone were raised was when Frenchman Jean-Claude Trichet was still the chief executive of the ECB. His successor Mario Draghi has only implemented interest rate cuts since the end of 2011. Current ECB president Christine Lagarde has not adjusted interest rates since taking office in November 2019.

ECB Vice President: Rate hike unlikely in July | Financial
Source link ECB Vice President: Rate hike unlikely in July | Financial

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