Ecb’s Knot Says Rate Hikes To Continue ‘for Quite Some Time’ After March
8 March 2023
By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Governing Council member Klaas Knot said on Tuesday that rate hikes should continue for quite some time beyond the ECB's monetary policy meeting next week.
In a speech in Amsterdam on Tuesday, Knot, who heads De Nederlandsche Bank, said that ‘given the underlying, persistent inflationary pressures, the ECB has expressed its intention to continue raising interest rates in just over a week's time and, I would suspect, for quite some time after that too.’
Rises in core inflation meant the ECB ‘still has plenty of work to do’, he said.
The ECB expected inflation in the euro area, ‘starting early this year, to gradually fall back towards 2%’, he said, although ‘[t]he decline in core inflation is expected to set in somewhat later.’
‘These inflation levels and inflation persistence call for strong monetary measures’, he said. It was, he said, ‘obvious that the ECB must do everything it can to get inflation back to 2% as soon as possible.’
He warned the audience, which was made up of pension fund representatives and insurers, that they would have to take inflation into account because ‘the interest rate button that the ECB can turn obviously does not give us full control over inflation.’
‘We saw that with the low inflation we had for a long time, and we see it now with the high inflation’, he said.