Friday, June 9, 2023
HomeEconomyECB must avoid unnecessary rise in real rates - Visco

ECB must avoid unnecessary rise in real rates – Visco


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ROME (Reuters) – European Central Bank Italy The European Central Bank (ECB) must avoid pushing real interest rates too high given levels of private and public debt in the euro zone, a senior policymaker said on Saturday.

Ignazio, Member of the Governing Council of the European Central Bank and Governor of the Bank of Italy Visco added that he does not think a recession is inevitable in order to bring down inflation.

The ECB has raised interest rates by 3 percentage points since July and pledged to “Deflation is clearly needed today, but we must be careful not to design unnecessary and excessive real interest rate rises,” Visco told the Warwick Economic Summit.

“Indeed, I believe that the credibility of our actions is maintained not by flexing our muscles in the face of inflation, but by Sustained by constant displays of wisdom and balance.” The ECB left the option open for follow-up measures after March, which raised Investors are skeptical about the magnitude of further rate hikes.

Investors and economists are concerned about deposit rates peaking at 3.% and 3.5%, suggesting a rate hike in March Only one or two changes later, and it ends mid-year.

Italian politicians expressed concern about the impact of higher interest rates as the country is heavily indebted.

Viscosity says ECB rates must continue “in a gradual but measured manner, based on incoming data and its role in assessing the inflation outlook” use in “.

Inflation has fallen about 2 percentage points since its peak in October, and further declines may be 500 natural gas price fall back.

But underlying price growth appears to be stubbornly high, leading to fears that inflation may remain above the ECB’s 2% target, partly because of nominal wage inflation. Rapid growth.

“While there is still ample (and excess) flow in the economic system nature, but I don’t see a compelling case for inflation to return to target,” Visco said.

Looking at the persistent inflations in many countries during

, Visco stated that the currency Significant improvements in policymaking and changes in European economies make a repeat of this scenario “unlikely”.



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