ECB Policymaker Suggests Another Interest Rate Hike in July
The European Central Bank (ECB) may need to increase interest rates by another 25 basis points in July to combat inflation, according to ECB policymaker Pablo Hernandez de Cos. However, the path beyond that remains unclear. Last week, the ECB raised its key interest rates by a quarter of a percentage point and significantly raised its inflation outlook through 2025, a situation that ECB President Christine Lagarde called “unacceptable.” De Cos said at a financial event in Santander, Spain, “If the central scenario of our forecasts published by the ECB last week materialises, we will also have to raise 25 basis points again in July, but beyond that it is not appropriate to make any forecasts.”
High Uncertainty in Decision Making
De Cos acknowledged the high uncertainty surrounding future decisions, stating “we will continue to take our decisions depending on the data and, in particular, on the aggregate assessment of the inflation outlook, the dynamics of underlying inflation.” This suggests that the ECB’s approach will remain data-driven and responsive to the broader economic climate.