‘Nothing off the Table’ in September, ECB’s Nagel Says
11 May 2023
By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Governing Council member Joachim Nagel said on Thursday that the ECB could continue hiking in September.
In an interview with Bloomberg TV, Nagel, who heads the Deutsche Bundesbank, said that ‘there’s nothing off the table’ at the ECB’s first meeting after the summer break, on 14 September.
The ECB’s decision to hike rates by 25bp last week ‘confirmed our commitment that our monetary policy path is not over to fight against inflation’, which was ‘still very sticky’, he said. ‘It's a very stubborn phenomenon, and as I said several times, we have to be even more stubborn.’
High and sticky inflation meant that the ‘story about hiking rates is not over, we have to do more’, he said. ‘So there are two more meetings before the summer break, and let's go.’
Regarding the level of the ECB’s key interest rates, he said that they were ‘coming closer to the restrictive territory, but we are not there.’
Rates were likely to stay at elevated levels for a long time, in his opinion: ‘When there's the point coming, that we could more or less stop the rate hikes, then I have the belief we have to stay there for a while, to wait what is the impact [from] what we did [in] the past, to see are we really successful.’
It would ‘take at least one and a half years till we see [inflation] numbers that are close to our target’, he said. ‘So we have to be patient here.’
Although it was ‘good news that the headline inflation is coming down’, he noted that ‘core inflation is still very sticky, but this is also not a surprise… food inflation is still very high.’
‘Inflation is still very sticky. It's a very stubborn phenomenon. And as I said several times, we have to be even more stubborn’, he commented.