By our economics editors
Sep 17, 2023 at 12:36 Update: an hour ago
It is unlikely that the European Central Bank (ECB) will cut interest rates early next year. Martins Kazaks, president of the Central Bank of Latvia and ECB director, said this at a conference in Santiago de Compostella, Spain.
The ECB raised interest rates in the euro area to their highest level ever for the tenth time in a row on Thursday. Central bank policymakers have hinted that those increases have come to an end.
In the financial markets, some traders are now anticipating a reduction sometime in the first half of next year. But according to Kazaks, that guess is wrong. He states that wage growth in the eurozone has not yet peaked.
According to Kazaks, it is also still unclear how quickly underlying inflation will weaken. For that reason, he does not rule out a further interest rate increase. According to the ECB director, people should not expect an interest rate cut in the spring or early summer.
According to the ECB president, no interest rate cuts have been discussed yet
ECB President Christine Lagarde was also present at the meeting of finance ministers of the euro countries in Santiago de Compostela. After questions about the chance of an interest rate cut, Lagarde stated that the ECB had not discussed such a step.
“We have not discussed an interest rate cut,” the ECB president said. French Finance Minister Bruno Le Maire also stated at the end of last month that there will be no interest rate cut from the ECB for the time being because inflation is still too high.
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2023-09-17 10:36:34
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