VIENNA, Jan 20 (Reuters) – European Central Financial institution policymaker Robert Holzmann expects no less than two interest-rate will increase of fifty foundation factors every within the first half of this 12 months, he stated in an interview with Austrian newspaper Die Presse printed on Friday.
His feedback tally with current remarks by different ECB policymakers together with ECB President Christine Lagarde pushing again towards market bets that the central financial institution would gradual the tempo of its price hikes given current falls in inflation and easing strain to maintain up with strikes by different central banks.
“My expectation is that this step (a 50-basis-point hike) will occur a number of occasions, no less than within the first half of this 12 months,” Die Presse quoted Holzmann as saying. The German phrase he used for “a number of” was “mehrere”, which implies two or extra.
Holzmann, a hawk who was among the many first on the ECB to push for elevating curiosity -rates on this cycle, additionally expressed his help for Lagarde.
“She is a reputable consultant of a stability-conscious financial coverage. Work within the (Governing) Council has additionally develop into barely simpler due to better unity,” he added.
Merchants just lately trimmed their expectations for the way a lot the ECB would increase borrowing prices, comforted by knowledge exhibiting decrease inflation in each the euro zone and the USA and associated speak of smaller hikes by the U.S. Federal Reserve.
However Lagarde and fellow policymaker Klaas Knot stated buyers have been underestimating the ECB’s willpower to carry inflation within the 20-nation euro zone again to its 2% goal, from 9.2% final month.
Holzmann stated that whereas headline inflation has eased, core inflation, which strips out risky power and meals costs, had not. He stated that so long as core inflation had not fallen considerably rates of interest must hold rising.
“Core inflation is at the moment at greater than 5%, which continues to be two-and-a-half occasions our goal,” he stated.
Reporting by Francois Murphy; Further reporting by Frank Siebelt in Frankfurt; Enhancing by Hugh Lawson
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