ECB Governors Think More Hikes Likely in Autumn, But I'll Await Data Before Deciding, Makhlouf Says

24 June 2023

By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Governing Council member Gabriel Makhlouf said on Saturday that although many of his fellow governors were pushing for hikes in the autumn, he was awaiting further data before making a decision.

In an interview with Irish daily the Irish Independent, Makhlouf, who heads the Central Bank of Ireland, said that ‘[o]n the evidence that we have at the moment, it does look like, in July, there will be another 25bp increase. Some colleagues do feel that we're likely to need further rises in the autumn. I'm just prepared to look at the evidence.’

‘I do feel that we're near the top of the ladder. Some others may feel we're further down, but we'll see’, he added.

The Irish government should be prudent with its fiscal policy, he said, describing the domestic economy as having ‘all the dynamics of overheating around.’

‘The main message we've been communicating [to the government] is: don't make this worse. Because there are clearly degrees of overheating. You could get to a point where you are making everything much, much worse and the evidence of it then becomes inflation – in particular, inflation going up’, he said.

‘And we've seen it. We've seen evidence of this less than 20 years ago. It's amazing how memory fades‘, he added.