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Thursday, April 24, 2025

Reshaping Perspectives and Catalyzing Diplomatic Evolution

The ECB may have to keep raising interest rates beyond the summer

On the sidelines of the G7 meetings, Nagel said the data does not allow us to think about changing our view that further rate hikes will be needed, and that also applies beyond the summer break.

In previous statements, Clash Knut, President of the Dutch Central Bank, said interest rate hikes implemented by the European Central Bank are starting to bear fruit, but more will be needed to contain the inflation.

The European Central Bank raised the interest rate on deposits to 3.25%, and Nagel indicated that the European Central Bank may have to continue raising borrowing costs after the summer.

It was the first time the ECB eased interest rate hikes this year.

The ECB raised rates in December, February and March by half a percentage point each month.

The bank kept its options open on future moves as it continues its battle to tackle high inflation in the eurozone, but did not mention the need for further increases.

The central bank said in its statement that inflation expectations “remain elevated for a very long time.”

He added that although underlying inflation has declined in recent months, underlying price pressures “remain strong”.

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Arab Desk
Arab Desk
The Eastern Herald’s Arab Desk validates the stories published under this byline. That includes editorials, news stories, letters to the editor, and multimedia features on easternherald.com.

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