(Ticker) – “There is no clear answer” when asked whether the European Central Bank (ECB) will raise rates at the meeting of next week. She stated it Peter Kazimirgovernor of the National Bank of Slovakia (NBS) and member of the governing council of the ECB, in a post on the Slovak central bank’s website, adding that “nobody has it today”.
“What we know are new data on inflation and the situation on the labor market – explained the central banker – The trend of inflation in the Eurozone in August confirmed that it is clearly too early to declare victory. Inflation remains stubbornly high and inflation expectations remain too far above our 2% target.
According to Kazimir, “it is therefore need to go one step further. As they say, better safe than sorry.”
The NBS number one then outlined two paths: “One option is to take a break in September and, if necessary, make another (hopefully definitive) hike of 25 basis points in October or December. The second option I seems preferable, reasonable.It is expected to deliver another 25 basis points next week and then take a break“.
The latter, “is a simpler and more efficient solution. The markets receive clearer indications on the probable terminal rate and we have more time to assess whether inflation is on a sustainable downward path towards our target.”