ECB’s de Guindos: ‘There Will Be Further, Necessary Rate Hikes’
27 December 2022
By David Barwick – FRANKFURT (Econostream) – The European Central Bank has to continue hiking interest rates in order to ensure a return to price stability, ECB Vice President Luis de Guindos said Tuesday.
In an interview with the Spanish Confederation of Young Entrepreneurs’ Associations, de Guindos said that the extent to which rates would rise ‘is something we will decide meeting by meeting and on the basis of incoming data, given the current high uncertainty.’
‘As we announced this month, there will be further, necessary, rate hikes until inflation is on a path back to close to our 2% target’, he added. He reiterated the expectation that the second half of 2025 would see inflation fall back to the ECB’s 2% target.
De Guindos described the situation as ‘very difficult’ and ‘a challenge for businesses and their sustainability’.
‘Our macroeconomic projections foresee a short-lived and shallow recession in the euro area at the end of the year’, he said. ‘However, we expect the economy to return to positive growth rates from the second quarter of 2023 and for these to remain in 2024 and 2025.’