ECB’s Nagel: Savers May Soon Be Able to Look Forward to Higher Interest Rates Again
6 April 2022
By David Barwick – FRANKFURT (Econostream) – Savers may benefit before long from increased interest rates, European Central Bank Governing Council member Joachim Nagel said late Wednesday.
In an interview on a German television business news programme, Nagel, who heads the German Bundesbank, said that high inflation ‘worries me, that worries all of us.’
‘Small and medium incomes are particularly hard hit by high prices’, he continued. ‘And that's where we, as central bankers, have to take action, because these high prices must not be allowed to become entrenched. And that will certainly be a task, especially for the Eurosystem this year.’
Although current inflation rates are influenced by special factors and will ease somewhat when these drop out of the measurements, ‘all in all, it is of course a development that we cannot like, and if we now look at the annual average for 2022, we expect price increases of 6% on average’, he said. ‘And that is of course too much.’
A worst-case scenario would be if the war continued, leading to even higher prices and more economic fallout, he said.
‘In our last monetary policy meeting in March, we agreed ... on a good path’, he said. Asset purchases will be reduced and then, based on information available in June, the Governing Council will decide anew, he said.
‘What we are seeing currently indicates that savers may soon be able to look forward to higher interest rates again’, he added.