The head of the Dutch central bank considers further rate hikes to be likely.
(Photo: Bloomberg)
Paris The head of the Dutch central bank, Klaas Knot, expects interest rates in the euro zone to remain high. “Whenever we’re going to get to the interest rate peak, we’re going to have to stay there for quite a considerable period of time,” Knot told Handelsblatt and three other European newspapers. The Council member of the European Central Bank (ECB) believes that at least two further rate hikes of 0.25 points are necessary.
Core inflation in the euro area is tougher than expected. “What started with energy prices has now spread elsewhere in consumer prices,” Knot told Handelsblatt, France’s Les Échos, Italy’s Corriere della Sera and Spain’s El Mundo. “It’s difficult to put the genie back in the bottle.”
Knot also made it clear that most of the interest rate hikes by the ECB have not yet reached the real economy. “We see an impact on financing conditions, but the implications for growth and inflation are yet to come,” he said.
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