ECB’s Kažimír: Mission Still Not Accomplished, Should Continue With Firm Step
28 July 2023
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Peter Kažimír on Friday said that the ECB was not done after yesterday’s 25bp hike and that it should continue with a ‘firm step’ towards price stability.
In a statement issued on the website of the National Bank of Slovakia, which he heads, Kažimír said that Thursday’s rate increase ‘brought us within reach of the peak of our efforts.’
‘In other words, we are nearing the end of the tightening of the monetary policy setting necessary to restore price stability’, he said, calling it ‘great that inflation continues to fall’ but noting that price stability would not be attained in 2023 or 2024.
‘While headline inflation continues to decelerate, primarily due to external factors, core inflation remains record high’, he said. ‘From my point of view, this means the need for extreme vigilance in the future. It is core inflation that hides risks for overall inflation. It is the core inflation numbers that show that we have not yet won.’
Inflation risks remained ‘clearly on the upside’, he said, citing ‘hot’ labour markets.
‘I don't have an answer for what will come in September’, he said. ‘Today, I would say that our mission is still not accomplished and that we should continue with a firm step on the way to the top. If we were to take a break in September, it would be premature to consider it automatically the end of the cycle. This will be decided by the incoming data on the economy.’