Ekonomické zprávy
03.11.2021

ECB "very unlikely" to raise rates in 2022 - ECB President

Reuters reports that European Central Bank President Christine Lagarde said that the ECB is very unlikely to raise interest rates next year as inflation remains too low.

"In our forward guidance on interest rates, we have clearly articulated the three conditions that need to be satisfied before rates will start to rise," she said.

"Despite the current inflation surge, the outlook for inflation over the medium term remains subdued, and thus these three conditions are very unlikely to be satisfied next year."

"Market interest rates have risen over the past weeks, mainly as a result of greater market uncertainty about the inflation outlook, spillovers from abroad to policy rate expectations in the euro area, and some questions about the calibration of asset purchases in a post-pandemic world," Lagarde said.

Lagarde also pushed back on the recent rise in yields, warning that the ECB will continue to use emergency asset purchases to keep borrowing costs down.

While the ECB sees price growth retreating from levels above 4% now to below its 2% target next year, investors are betting on more durable price pressures that would trigger policy tightening.

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