ECB’s Holzmann: ‘An Interest Rate Hike of 0.75% Might Be Necessary’

11 July 2022

By David Barwick – FRANKFURT (Econostream) – The European Central Bank might have to hike rates by as much as 0.75 basis points if things don’t get better, Governing Council member Robert Holzmann said on Saturday.

In an interview with Austrian daily Kronen Zeitung, Holzmann, who heads the Austrian National Bank, said, ‘Inflation in our country has recently risen to 8.7%, the price increase has intensified, and clear signals are needed that the population understands.’

‘If the situation does not improve, an interest rate hike of 0.75% might be necessary, he said.

How long it will take for inflation to return to 2% ‘depends on the determination of the measures, it will probably take until next year and the year after’, he said.

However, he said, ‘As long as wage rounds are negotiated according to inflation in the past period, I don't see [a wage-price spiral] happening.’