ECB’s Šimkus: Would Not Be Surprised If Council Discussed Hiking in September

26 June 2023

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Gediminas Šimkus on Monday reiterated that he would not be surprised if the ECB discussed a further tightening of monetary policy at the September meeting.

In an interview with CNBC, Šimkus, who is Chairman of the Board of the Bank of Lithuania, said, ‘It’s very clear for me that we need at least one more hike, and this is going to happen I think in July. Seeing all this, so to say, environment, and also the market expectations of the interest rate path, and also, given … the stickiness of inflation and the upside risks, I think I would not be surprised to discuss at the Governing Council a hike also in September.’

Although inflation was subsiding, in part thanks to tighter monetary policy, ‘it will get to our target only by 2025’, he noted. And although core inflation had ‘peaked or it’s very close to its peak … the message is that this core inflation is sticky, and there are underlying forces, pressures, such as increasing wage growth, which in a way continues pushing the inflation up or keeping the inflation higher than the monetary policy target.’