By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Joachim Nagel said on Friday that a rate hike would “probably” be needed if the inflation outlook were to worsen, a scenario he described as “conceivable.”
Speaking to Bloomberg, Nagel, who heads the Deutsche Bundesbank, said that “[a]s things currently stand, it is conceivable that the medium-term inflation outlook could deteriorate and inflation expectations could rise on a sustained basis, meaning that a more restrictive monetary policy stance would probably be necessary.”
He said that more “reliable data” about this should be available by the Governing Council’s next meeting on April 30.
Referring to the inflation surge in 2022, Nagel said that experience would “play an important role in this context,” adding that the ECB was now “in a better starting position.”
He described the decision to keep rates unchanged as “appropriate” but acknowledged that the current environment remained “challenging.”
“The further development of the conflict will have a major impact on medium-term inflation,” Nagel said, noting that the ECB would make decisions based on this.
He reiterated that the ECB would maintain a “prudent policy stance” and act decisively, underscoring that price stability remained its primary mandate.
Related articles:
- ECB’s Lagarde: We Are “Well Positioned”, Will Stay “Agile” and “Do What Is Necessary”
- ECB’s Kazāks: Rate Hike Needed if Energy Shock Risks Lifting Inflation Expectations
- ECB’s Villeroy: No Need to Raise Rates Now, But “Won’t Let Inflation Settle In”