ECB Governing Council member Klaas Knot has expressed concerns about the current high inflation rate, suggesting that the current mildly restrictive monetary policy may not be enough to counter it.
Knot stated, “We are now in what I would call mildly restrictive territory with policy rates but inflation is not mild. Inflation is still much too high.”
Knot added that the underlying inflation rate, which has been creeping up towards six per cent, needs a sufficiently restrictive stance to be countered. “Where is sufficiently restrictive, I don’t know but clearly not where we are today,” he said.
The ECB policymaker also noted that it is too early to discuss a pause in tightening measures. “For a pause, I would really need to see a convincing reversal in underlying inflation dynamics,” Knot explained.
