The European Central Bank (ECB) may have to raise rates again in May to fight inflation, Dutch central bank chief Claas Knott said on Thursday, joining a growing group of officials calling for tighter monetary policy even after recent turmoil in the banking sector, Reuters writes. .
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The ECB last week raised interest rates by 50 basis points to the highest level since late 2008, but signaled no further moves amid concerns that the recent sell-off in global banking stocks could spill over into a wider crisis.
But the governors of the central banks of Germany, Austria, Slovakia and Lithuania have just announced that the ECB’s interest rate hike is not over because inflation is too high and could be more persistent than even the central bank’s own forecasts.
“I think it’s highly unlikely that rate hikes are over,” Knott told Reuters in an interview. “It is unlikely that keeping rates in a slightly restrictive territory would be enough to contribute to the decline in inflation that we are probably all hoping for,” he emphasized.
