ECB Rate Hike in May Not Certain Yet, Reinesch Says

6 February 2023

By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Governing Council member Gaston Reinesch said on Friday that a rate hike in May is a possibility, though not yet a certainty.

‘It does not have to come, but it can’, Reinesch, who heads Banque Centrale du Luxembourg, said on Luxembourgish radio station RTL when asked about the possibility of the ECB continuing to hike its key interest rates in May following a pre-announced 50bp hike in March.

The ECB’s signalling of a 50bp move in March was a ‘clear statement’ for that meeting, he said.

It was too early to give the all-clear on inflation, he said, noting that ‘global inflation has decreased slightly, but is still far too high.’ Core inflation has stagnated, ‘if not increased very slightly,’ he warned, adding that recent ECB policy moves were aimed at ‘breaking that momentum’.