ECB’s Holzmann calls for vigorous action, de Guindos cautious on core inflation

ECB Governing Council member Robert Holzmann told German newspaper Boersen Zeitung that the persistence of inflation currently calls for further action: “The persistence of inflation currently argues for another 50 basis points (in May).” Holzmann emphasized that failing to act vigorously now would exacerbate the inflation problem and ultimately necessitate even stricter measures.

Holzmann also noted a consensus among ECB Governing Council members: “There is a great deal of common understanding in the ECB Governing Council that we have not yet reached the end of the line when it comes to key interest rates. We must continue to act decisively and continue to raise key interest rates noticeably even beyond May.”

In a separate occasion, ECB Vice President Luis de Guindos expressed caution regarding core inflation: “We believe core inflation provides a better signal of medium-term inflationary trends,” de Guindos said in Madrid. “Headline inflation will continue to decelerate, but on core inflation, we are not so optimistic.”