Peter Kazimir, European Central Bank Governing Council member and Slovak central bank governor, said that given the acceleration of the growth of core consumer inflation to a record high, the ECB should continue tightening monetary policy. He also added that the risks to the inflation forecast are shifted upward. Yesterday, the ECB raised the interest rate by 0.5%, and predicted inflation above its target level until 2025.
Preliminary data published by Eurostat showed that eurozone annual inflation declined slightly in February, reaching the lowest since last May, while core inflation growth accelerated to a record high. According to the report, the consumer price index rose by 8.5% per year after an increase by 8.6% in January. Economists expected an increase by 8.2%. Meanwhile, on a monthly basis, the consumer price index rose by 0.8% after falling 0.2% in January. This was the first increase in the last four months. Eurostat reported that the core consumer price index - energy, food, alcohol & tobacco - rose by 5.6% per year after an increase by 5.3% per year in January. Economists had expected a 5.3% increase. Today at 10:00 GMT, Eurostat will publish the final CPI data for February. Consensus estimates suggest that inflation slowed to 8.5% per annum from 8.6% per annum in January, and increased by 0.8% over the month.
"Despite the alarming events in the financial markets, I still believe that the ECB should continue raising interest rates... we are not yet at the finish line," Kazimir said/ However, he did not make the case for a hike as soon as the next meeting and said it was useless to speculate about the ECB's May meeting.
Meanwhile, Francois Villeroy de Galhau, Bank of France governor and ECB Governing Council member, said that yesterday's ECB decision reflects the Central Bank's priority to combat inflation, and also signals strong confidence in the reliability of European banks. "I think we have sent a strong and ambivalent signal of confidence. This reflects both confidence in our anti—inflationary strategy and confidence in the reliability of European and French banks," Villeroy said.