The Italian Prime Minister criticizes the European Central Bank for raising interest rates
Today, Wednesday, Italian Prime Minister Giorgia Meloni criticized the European Central Bank. Because of the frequent hikes in interest rates, saying that it takes an “overly simplistic” approach that can do more harm than good.
The European Central Bank, during its last monetary policy meeting in June, decided to increase its key interest rates for the eighth time in less than a year by a quarter of a percentage point, raising the benchmark deposit rate to 3.5%.
The bank said a ninth consecutive rate hike was certain in July, as it expected inflation to remain above the target level of 2% until the end of 2025.
“It is right to decisively fight inflation, but for many people the simplistic prescription of interest rate hikes by the ECB does not seem the right course of action,” Meloni told parliament.
European Central Bank President Christine Lagarde announced on Tuesday that her bank will “continue” to raise interest rates at the monetary policy meeting in July because it is too early to “declarate victory” in the fight against inflation in the eurozone.
“Our work is not finished, unless there is a significant change in our expectations, we will continue to raise interest rates in July,” she said on the occasion of a bank forum in Sintra, Portugal.
“In the near future, it is unlikely that the central bank will be able to say with certainty whether interest rates will peak,” she added.
Lagarde suggested raising interest rates in July at the next meeting of the European Central Bank.
Lagarde warned of a “very rapid reversal of monetary policy” in the face of a “stubborn process of inflation” in the euro area, and pointed to the “uncertainty” surrounding the impact of her monetary policies, whether in their “duration” or “level”.
Price rises in the eurozone eased to 6.1% year-on-year in May, far from the record 10.6% in October and the 2% target set by the central bank.
The latest forecasts published by the European Central Bank in June showed that inflation will reach 5.4% in 2023, 3.0% in 2024 and 2.2% in 2025.
(Reuters, AFP, The New Arab)
2023-06-28 09:16:12
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