In an interview, ECB Executive Board member Isabel Schnabel “a rate increase in July is possible in my view.” But she added, “We of course have to wait and see how the data evolve up to the time of the decision. The first interest rate hike will in any case not take place until after the end of net asset purchases; we have committed to that.”
Schnabel also noted that energy is “not the only factor” for the current high inflation. Core inflation also “climbed strongly to 3.5%”. So, “we are seeing that inflationary pressures are becoming more broad-based.”
“There can be no doubt that we will see higher wage demands if inflation remains so high over a prolonged period. We need to prevent high inflation from becoming entrenched in expectations. Talking is no longer enough, we need to act,” she said.
