Will the ECB raise interest rates again in May?
(Photo: Bloomberg)
Madrid The head of the Spanish central bank, Pablo Hernandez de Cos, believes that core inflation in the euro zone will remain high for the remainder of the year. Therefore, the development must be closely monitored, said the Council member of the European Central Bank (ECB) on Monday in Washington. With his comments, he left the door open for further rate hikes by the ECB.
In the fight against high inflation, the ECB has raised interest rates six times in a row since July – most recently by 0.50 percentage points in mid-March. The deposit rate that banks receive from the central bank for parking excess funds is 3.0 percent. An increase of another 0.25 percentage points is firmly expected for the interest rate meeting of the ECB on May 4th. Another step of this size is expected in the summer.
Thanks to falling energy prices, inflation fell from 8.5 to 6.9 percent in March. Core inflation, which excludes volatile energy and food prices, rose to 5.7 percent in March for the fourth month in a row.
More: ECB Chief Economist Lane – Another rate hike could follow in May