ECB Rate Hikes Probable in June and July, Picture Beyond That ‘a Lot Less Clear’, Makhlouf Says

2 June 2023

By Xavier D’Arcy – FRANKFURT (Econostream) – The European Central Bank is likely to hike its key interest rates both in June and July, but the picture beyond the summer is a lot less clear, Governing Council member Gabriel Makhlouf said on Friday.

In an interview with Irish national television and radio broadcaster RTÉ, Makhlouf, who heads the Central Bank of Ireland, said: ‘I think that probably June and July, we'll see rate increases, but beyond that I think the picture is a lot less clear.’

‘We haven't reached the moment where we can say let's now stop. We need to see and be confident that we're seeing inflation actually on a trajectory that is going to achieve our 2% target’, he said.

The recent fall in Eurozone headline inflation was ‘very welcome’, but nonetheless the ECB’s next meeting was ‘likely to see another increase’ in its key interest rates, he said.

Another 25bp hike was most likely, he thought: ‘We decided last month to actually move to a 25bp [hike] and I think if we make an increase again in a couple of weeks, it's likely to be of a similar size.’