ECB Governing Council member Martins Kazaks said, “it’s clear that interest rates will need to rise much higher to bring inflation down to the target of 2% over medium term.”
“There’s no need to pause at the turn of the year. The rate increases must continue into the next year — until inflation, especially core inflation, shows a visible slowdown,” he said.
“In my view, recession in the euro area is a baseline scenario, but so far it’s likely to be relatively shallow and brief,” Kazaks said. “And hence insufficient to break the backbone of inflation persistence.”
