(Bloomberg) — European Central Bank Governing Council member Gediminas Simkus said he wouldn’t be surprised if officials lift borrowing costs again after the summer.
(Bloomberg) — European Central Bank Governing Council member Gediminas Simkus said he wouldn’t be surprised if officials lift borrowing costs again after the summer.
The Lithuanian central bank chief described the interest-rate increase planned for July as “pretty much clear,” stressing that core inflation may “still peak.”
“We need to provide very credible monetary policy to make sure that we by all means will fulfill our mandate, we will make sure about price stability and we’ll get inflation to the 2% target,” Simkus told an online event organized by MNI on Tuesday. “I would in no way be surprised considering a hike in September.”
After inflation projections were raised a touch last week, some officials have warned that rate increases may need to persist beyond the July meeting that analysts have widely flagged as the end of the euro zone’s historic monetary-tightening cycle.
While others are more cautious about speculating on a decision that’s still so far away, money markets have boosted wagers on hikes persisting.
In the event of “a clearer deceleration in inflationary pressures, that would kind of change my tone,” Simkus said. “But it’s not only about the current inflation, it’s also about the inflation outlook. It’s very much about core inflation.”
He said he doesn’t expect recent drops in producer prices to be quickly reflected in consumer inflation.
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