(Tiper Stock Exchange) –
Even if inflation in the euro area begins to slow down, “it is not yet the time to stop” interest rate hikes. Current data “indicate that interest rates will have to be raised again, now is not the time to stop”. This is the line expressed by chief economist of the ECB, Philip Lane, in an interview with Le Monde. A statement that comes within hours of the statements of the member of the board Isabel Schnabel for which, “given the persistence of inflation it is too early to claim victory” and which adds up to that of other members of the council. The patrol of those, including the governor of the Bank of Italy, appears to be less numerous Ignatius Visco, which call for greater prudence and to consider the risks of inflation at least equal to the negative effects on the balance sheets of businesses and households deriving from the higher costs of loans. In view of the next meeting of the central bank on 4 May, the hypothesis of a new rate hike is growing, now at 3.5%, even if its size could be reduced to 25 points.
In March, consumer prices in the euro area increased by 6.9% year on year, the lowest rate recorded for a year, well below the peak of 10.6% reached in October. A “significant” drop that – he underlined Lane – is “welcome as it reduces pressure on the cost of living”. However, – he specified Lane – “first of all” it is a matter of guaranteeing a return to the ECB’s inflation target of 2% “within a reasonable time frame”.
The chief economist of the ECB he estimates that the monetary tightening introduced a year ago is gradually having an effect on households. “We are witnessing – said Lane – a sharp drop in mortgage demand. For businesses, we are witnessing a significant drop in investment. All these impacts will continue to gradually spread through the economy, it’s not over”, he added.
Lane however, he admitted that he “doesn’t have a crystal ball, it will depend on the economic data”.