Next ECB rate cut could be longer in coming
Business
Next ECB rate cut could be longer in coming
(Reuters) - The next interest rate cut by the European Central Bank could be longer in coming after a recent uptick in inflation, ECB Governing Council member Robert Holzmann was quoted as saying on Saturday.
"I don't see any interest rate hikes at the moment. What could happen, though, is that one takes more time until the next interest rate cut," Holzmann told Austrian newspaper Kurier.
Eurozone annual inflation accelerated in November to 2.2% from 2.0% a month earlier and above the ECB's 2% target rate.
"Yes, there are signs of an upward trend in some energy prices. But there are also other scenarios as to how inflation could return, like via a stronger devaluation of the euro," said Holzmann, who is the head of the Austrian central bank.
Holzmann, who is widely regarded as a hawk on inflation, was also asked about the prospect of incoming U.S. President Donald Trump imposing trade tariffs, and how that could affect economic growth, price pressures and monetary policy.
"A likely scenario is that Trump's tariffs lead to an overall slowdown in growth, but also create inflationary pressure. More so in the US than with us," Holzmann said.
"How strong the effect will be depends crucially on whether and how much the dollar appreciates and the euro depreciates."
