ECB’s Holzmann: Will Probably Have to Hike Some More in May, But To Decide When We Have All Data

23 March 2023

By David Barwick – FRANKFURT (Econostream) – The European Central Bank will likely need to hike further at the May monetary policy meeting, but the decision won’t be made before all relevant information is available, according to Governing Council member Robert Holzmann on Thursday.

At a press conference of the Austrian National Bank, which he heads, Holzmann said, ‘We have five weeks until the next meeting, a lot of water will flow down the Delaware and the Danube before then, so all things and changes will be taken into account when we make the next decision.’

‘But from today's point of view, especially the development of the last few days has not shown that this will have any real effects’, he said, referring to recent banking sector turmoil. ‘That is, for the May decision...we'll probably have to do some more, but the decision will be made when we have all the data, and that will be in May.’

As of mid-2022, the ECB ‘reacted very, very energetically to this stubborn inflation’, he said, taking ‘very strong steps to indicate that we want to get inflation under control as quickly as possible.’

‘And the decision a week ago was also due to the fact that we saw that the European financial markets are ... very well positioned and therefore we can afford to raise another 0.5 as well, because there was no need here of having to deal with possible disturbances on the financial markets’, he continued.

‘The current plan here [with respect to the pandemic emergency purchase programme] is to continue through late '24, but the decision as to whether there are any early changes will depend on financial market developments’, he said.