ECB’s Simkus joins camp supporting 75 bps Oct rate hike By Reuters
Economy 6 minutes ago (Sep 29, 2022 02:36AM ET)
(C) Reuters. FILE PHOTO: The new governor of the Lithuanian central bank, Gediminas Simkus, poses for a picture in Vilnius, Lithuania, April 1, 2021. REUTERS/Ints Kalnins/
FRANKFURT (Reuters) – The European Central Bank should raise interest rates by 75 basis points (bps) in October, Lithuanian central bank chief Gediminas Simkus told Bloomberg TV on Thursday, joining several colleagues calling for another large increase.
The ECB has raised rates by a combined 125 basis points over its past two meetings and promised further increases as inflation is rising towards 10%, and longer-term expectations have moved above its 2% target.
“My choice would be 75,” Simkus said, referring to basis points. “I understand a couple of options may be on the table but 50 is the minimum.”
When asked if a full percentage point could also be on the table, Simkus said that would be “definitely too much”, echoing similar comments from some policymakers.
Although the next policy meeting is almost a month away, ECB policymakers Peter Kazimir and Robert Holzmann have both come out in favour of a 75 bps increase while Olli Rehn listed 75 bps as one of the acceptable options.
The ECB said it would keep on raising its 0.75% deposit rate at least until it hits the neutral or natural level, an undefined rate that no longer stimulates growth but does not restrict it.
“I believe that the natural interest rate at this juncture is somewhat lower than 2% but there are many estimates,” Simkus said.
He said the ECB should also start talks “as soon as possible” over reducing its balance sheet, but a discussion should not necessarily mean imminent action.
ECB’s Simkus joins camp supporting 75 bps Oct rate hike
LONDON (Reuters) – Former Bank of England governor Mark Carney criticized the new British government’s plan to cut taxes for under-cutting the attempts of the central bank to curb…
PARIS (Reuters) -Several hard-left trade unions in France are calling for a nationwide strike on Thursday to demand pay increases to cope with soaring inflation, threatening…
By Chris Taylor NEW YORK (Reuters) – If you are feeling the effects of inflation, here is a news flash: Your kid is, too. Allowances do not go as far as they used to. In fact,…
(C) 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.