ECB policymakers cautious on interest rate hike in April
ECB officials see little evidence to support an interest rate hike in April despite rising energy costs. Markets now anticipate a policy move starting in June.
The European Central Bank is currently signaling a cautious approach toward raising interest rates this month, as policymakers have yet to see definitive evidence that the recent energy-led inflation spike is becoming broad-based. While policy tightening remains a serious consideration, officials are seeking concrete data on second-round effects before moving forward with a hike. Inflation rose to 2.5% in March, up from 1.9% in February, largely due to the impact of Middle Eastern tensions on the price of Brent Crude Oil. Despite this increase, some officials point out that domestic inflation is slowing and that higher energy costs are actually reducing disposable income, which may limit the ability of businesses to raise prices.
"I can't tell you what we're doing on April 30 but I can tell you that as of today, I don't have evidence to support a hike."
