ECB Should Keep Hiking, With Both 25BP and 50BP on the Table in May: Vasle
13 April 2023
By Xavier D’Arcy – FRANKFURT (Econostream) – The European Central Bank needs to keep raising rates, given persistent underlying inflation in the Eurozone, and could hike in May by either 25bp or 50bp, Governing Council member Boštjan Vasle said on Thursday.
In an interview with Reuters, Vasle, who heads the Slovenian Central Bank, said the ECB has ‘to continue tightening monetary policy’. He considered it ‘too early to decide the pace of our next move, but the options I'm considering are a 25 and a 50bp increase.’
‘Headline inflation is coming down but we are all focused on core inflation, which is still moving in the wrong direction’, he said. ‘This is, of course, not unexpected given the tightness of the labour market, and still not fully materialised pass-through effects.’
‘Labour market and wage developments are the most critical factors when assessing inflation and they will have a major impact on our decision,’ he said.
According to Reuters, Vasle acknowledged that uncertainty remained high after last month's banking sector volatility and said the ECB needed to watch carefully whether rate hikes revealed weaknesses in the economy.