ECB’s de Cos: Unlikely to See Rate Hike in 2022

20 January 2022

By David Barwick – FRANKFURT (Econostream) – The European Central Bank is unlikely to hike interest rates this year, ECB Governing Council member Pablo Hernández de Cos said Thursday.

In an interview with Spanish public radio and television RTVE, de Cos, who heads Banco de España, said that while inflation should return to below 2% by 2023-2024, ‘if this macroeconomic scenario changes, in particular the inflation scenario, then obviously monetary policy will have to change.’

‘With the conditions we have today, including the inflation forecasts ... an increase in interest rates in 2022 is not to be expected’, he said.

After remaining ‘relatively high’ in the first half of 2022, inflation would start to fall and in Spain could wind up below 2% by year’s end, he said. The risks to this had to do with energy prices, in turn dependent on geopolitical developments, and wages.

‘So far, not only in Spain, but also in the rest of Europe, we are seeing wage moderation’, he said.