President of the European Central Bank (ECB), Christine Lagarde has hinted at more interest rate hikes, re-affirming the ECB’s commitment to combating inflation.
At a hearing of the Committee on Economic and Monetary Affairs of the European Parliament, Lagarde underlined that ensuring price stability is the ECB’s responsibility, reports Xinhua news agency.
Inflation in the euro zone eased noticeably in May, but at 6.1 per cent is still well above the ECB’s target of 2.0 per cent for stability.
“Price pressures remain high,” Lagarde stressed.
The ECB will ensure that the policy rates will be brought to sufficiently restrictive levels in order to achieve a timely return of inflation to a 2 per cent medium-term target, she said.
According to some central bank chiefs, a further increase of a quarter of a percentage point is likely to follow on June 15.
German Bundesbank President Joachim Nagel has said he expects further interest rate hikes, adding that it is not certain that the interest rate peak will be reached as early as this summer.
Meanwhile, Ireland’s central bank chief Gabriel Makhlouf also anticipated further tightening in June and July, in view of the ongoing price pressure in the euro area.
However, “beyond that, I think the picture is much less clear”, he said recently.
The ECB has already raised key interest rates seven times in a row by a total of 3.75 percentage points.
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