The European Central Bank (ECB) may have to increase interest rates again due to the high inflation in Eurozone, as announced by ECB President Christine Lagarde on Thursday, the 2nd of March.
«At this point in time, it’s possible that we will continue on this path,» Lagarde said in an interview to Spain’s Antena 3 TV channel.
ECB previously hiked interest rates five times in five consecutive meetings.
At the beginning of February the main interest rate was increased to 3% and overnight deposit rate was increased to 2.5% and overnight lending rate was increased to 3.25%.
It is expected for the interest rate to be increased by another 0.5% at the meeting of the Council of ECB scheduled for the 16th of March. Nevertheless, experts are not completely convinced what kind of level the base interest rate might reach.
Lagarde mentioned that it is not possible to predict the future growth of interest rates. Decisions will be made based on available economic data.
Annual inflation in Eurozone did drop from 8.6% in January to 8.5% in February, demonstrating continued decline for the fourth consecutive month, according to the flash estimate from Eurostat.
However, this drop was still below what analysts previously predicted, and can be explained with high food product prices.
Also read: Inflation in Eurozone shows decline for fourth consecutive month