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HomeEconomySchnabel says ECB must keep raising rates despite sluggish economy

Schnabel says ECB must keep raising rates despite sluggish economy

FRANKFURT (Reuters) – The euro zone is facing an economic downturn, but inflation remains too high, so interest rates need to keep rising, European Central Bank board member Isabel Schnabel said.

“The looming downturn will have a dampening effect on inflation,” Schnabel told German news site t-online. “However, the starting point for interest rates is very low, so it is clear that we need to continue to raise interest rates.”

Although Schnabel has not considered recession as fundamental for the euro area The situation, she warned, may be unavoidable in Germany, the largest economy in the 19 group of countries.

The market expects two basis points 50 and rate hikes in October. Schnabel gave no indication of which way she preferred, saying only that the ECB would do whatever is necessary to control inflation.



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