(Bloomberg) — European Central Bank Governing Council member Bostjan Vasle said interest-rate hiking will need to continue if inflation proves to be more stubborn than is currently expected.
(Bloomberg) — European Central Bank Governing Council member Bostjan Vasle said interest-rate hiking will need to continue if inflation proves to be more stubborn than is currently expected.
While headline price gains are moderating, underlying pressures will be at relatively high levels for an extended period of time and could be stoked further by government spending and boosts to wages, the Slovenian central bank chief told Bloomberg TV on Tuesday.
“If inflation will turn out to be more persistent than we believe at the moment, of course further action in terms of interest rates and also other fields will be needed,” Vasle said.
“Let’s wait and see what will happen during the summer months and then have a new decision in September.”
The remarks come as talk intensify over whether the ECB’s historic bout of monetary tightening will extend into the fall.
That’s something that several of Vasle’s colleagues have said they’re open to — even as the euro-zone economy loses momentum.
The ECB can’t fight against inflation alone, Vasle said, urging fiscal policy to also play a role.
“As we saw in the past — it’s extremely important that both policies are working in the same direction,” he said.
“When monetary policy is tightening its conditions it will be very much needed that fiscal policy will do the same in order to bring inflation down as soon as possible and at the same time with the lowest possible costs.”
–With assistance from Alexander Weber and Jana Randow.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
