ZURICH, May 11 (Reuters) – The European Central Bank will need to adjust interest rates soon if the inflationary outlook does not \u200csignificantly improve, ECB Governing Council Member Martin Kocher was quoted \u200cas saying on Monday.<\/p>\n
Speaking to Switzerland’s Neue Zuercher Zeitung newspaper, Kocher said that even with \u200benergy prices being pushed up by the Iran conflict, it made little sense to anticipate the ECB’s next move weeks ahead of its June 11 policy meeting.<\/p>\n
“However, if the situation does not improve significantly, there will be \u200cno avoiding an interest rate \u2060move in the near future,” he said when asked if he agreed with market expectations that the ECB would \u2060raise rates in June.<\/p>\n
While noting it had been justifiable for the ECB to hold off an interest rate hike in April, Kocher said it should \u200bnot wait \u200btoo long to tighten monetary policy \u200bif energy prices fail to \u200cimprove rapidly and significantly.<\/p>\n
Asked about potential second-round effects from the U.S.-led conflict with Iran, he said there had not yet been many wage negotiations in Europe since the war began.<\/p>\n
“What’s clear is that if the war drags on and energy prices remain high, the risk of second-round effects \u200cwill increase,” the Austrian central bank governor \u200bsaid.<\/p>\n
Still, that impact may differ from the \u200binflation surge of 2021\u201322 as \u200bdemand is now weaker, Kocher said.<\/p>\n
Asked whether Europe risked \u200cslipping into stagflation, Kocher said the \u200brecovery in Germany \u200band Austria had been jeopardised by the Middle East conflict, while inflation risks had increased.<\/p>\n
“So the risk of a stagflationary development can’t \u200bbe ruled out, even \u200cthough the economy and the labour market remain resilient,” he said. “How \u200blong the conflict lasts will be decisive.”<\/p>\n
(Reporting by Dave GrahamEditing \u200bby Ludwig Burger and Shri Navaratnam)<\/p>\n","protected":false},"excerpt":{"rendered":"ZURICH, May 11 (Reuters) – The European Central Bank will need to adjust interest rates soon if the…\n","protected":false},"author":2,"featured_media":422453,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,12701,18385,3508,216868,111,139,69],"class_list":["post-422452","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-energy-prices","tag-european-central-bank","tag-interest-rates","tag-martin-kocher","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/422452","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=422452"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/422452\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/422453"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=422452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=422452"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=422452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}