Strong likelihood of ECB rate hike
If the wave of inflation gripping the eurozone doesn't abate, ECB chief Christine Lagarde said on Friday she sees "a strong likelihood" that the bank will hike rates before 2022 ends.
European countries have seen prices rise after the pandemic drastically disrupted supply chains, and the situation grew worse starting in late February after Russia invaded Ukraine, causing a spike in energy and food prices.
While central banks worldwide have started tightening borrowing costs to fight inflation as the impact from the war in Ukraine spread, the Frankfurt-based bank has refused to do the same, despite pressure to do so.
In an interview on CNBC, Lagarde said central bankers will be watching inflation expectations, wages and other indicators, but, "If the situation continues, as predicated at the moment, there is a strong likelihood that rates will be hiked before the end of the year. How much how many times remains to be seen and will be data dependent."
She also said the bank would likely end its asset purchase program meant to support the economy during the pandemic "in the course of the third quarter with a high probability that it will be early in the quarter."
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