ECB’s Vasle: Future Rate Hike Size to Be Determined Based on Inflation, Economic Outlook

28 October 2022

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Boštjan Vasle on Friday said again that the size of future ECB rate hikes would depend on inflation prospects, adding however that the economic outlook would also play a role.

In a statement issued in his name by the Bank of Slovenia, which he heads, Vasle said that yesterday’s 75bp rate hike was part of the ‘decisive normalization of monetary policy’ and constituted ‘significant progress towards withdrawing monetary policy accommodation.’

‘At the same time, we expect further increases in interest rates in the future as well, whereby we will judge their size at each session separately, depending on the inflationary and economic outlook’, he said.

Following the September rate hike, the corresponding statement issued in Vasle’s name had said merely that coming hikes would depend on inflation prospects.

‘Increases in interest rates and their impact on financing conditions will contribute to the fact that the current inflationary pressures will not be extended beyond the medium term’, he said in the most recent statement, substituting ‘pressures’ where previously ‘expectations’ had stood, but otherwise essentially leaving the sentence unchanged.

Taking note of the economic deceleration, Vasle said the slowdown had broadened recently.