ECB Chief Economist Urges Rate Hike to Tackle Sticky Inflation
The European Central Bank (ECB) might raise interest rates in May, says the bank’s chief economist, Philip Lane. The ECB wants to ensure inflation returns to its 2% target “in a timely manner.” While inflation has fallen significantly in some sectors, it persists in others, such as food, leading to the risk of “sticky” inflation. Lane admits that inflation has been too high for almost two years due to pandemic bottlenecks and the energy shock caused by Russia’s invasion of Ukraine. The ECB has already raised interest rates by 3.5 percentage points from -0.5% to 3%. Lane believes that leaving the interest rate at the current level would be “inappropriate,” and the bank needs to bring inflation closer to its target within a reasonable time period. So, the ECB might raise interest rates again in May to achieve this goal.
Clever Robot News Desk 1st May 2023