ECB Still Has To Complete Last Stretch of Rate Hikes, de Guindos Says

1 June 2023

By Xavier D’Arcy – FRANKFURT (Econostream) – The European Central Bank has completed most of its tightening journey, but still has to complete the last stretch, Vice President Luis de Guindos said on Thursday.

De Guindos told Spanish radio station RNE that the ECB was likely to stick with its current pace of 25bp rate hikes.

‘A big part of the journey has been done but there is still the last stretch’, he said in the interview.

Regarding the pace of tightening, he said that ‘[t]he size of the interest rate hikes and the number of interest rate hikes will depend on the data we receive - last month it was already 25bp, and so 25, I think, is the new norm’.

The latest inflation data were positive, in his view, because the ‘trend is clearly pointing towards a slowdown’, though he noted that the ECB was ‘still very far away from our inflation target of around 2% in the medium term’.