Patsalides Says ECB Should Not Rush Interest Rate Hikes
Cypriot central bank chief Christodoulos Patsalides says the ECB should not rush rate hikes despite rising energy costs. He noted the baseline outlook holds.
The European Central Bank should exercise caution and avoid premature interest rate hikes in response to volatile energy costs, according to Cyprus central bank governor Christodoulos Patsalides. He indicated that the bank's baseline economic outlook remains intact and that there is currently no evidence of inflation becoming deeply embedded within the 21-nation bloc.
The surge in energy prices, exacerbated by the ongoing conflict involving the United States, Israel, and Iran, is likely to push euro zone inflation above the 2% target this month. This development has led to internal debates among Governing Council members about whether to raise rates to mitigate second-round effects.
