ECB’s de Guindos Calls for Caution on Interest Rate Hikes Amid Stagnating Growth
ECB Leadership Urges Prudence as Economic Growth Slows
Vice President de Guindos’ Warning
FRANKFURT, May 11 (Reuters) - The European Central Bank's outgoing Vice President Luis de Guindos urged colleagues, in an interview published on Monday, to be prudent when deciding on an expected interest rate hike next month as growth was set to weaken.
Market Expectations for Rate Hikes
Investors see the ECB raising its key rate at its next meeting on June 10-11 and once or twice again by next spring to stem an energy-led rise in inflation caused by the war in Iran.
De Guindos’ Call for Caution
But de Guindos, who won't be at the meeting as his term runs out at the end of May, called for caution.
"My impression is that the data on growth over the coming weeks are not going to be good," he told the Financial Times. "That’s why I would call for prudence: the impact on growth is going to become much more visible over the coming weeks. And we need additional clarity with respect to the conflict."
Other Policymakers’ Views
Other policymakers have signalled a rate increase next month is likely, barring a resolution to the conflict and a collapse in energy prices.
Reporting Credits
(Reporting by Francesco Canepa; Editing by Andrea Ricci)