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Klaas Knot at the World Economic Forum in Davos
Photo: LAURENT GILLIERON / EPA
According to Dutch Council member Klaas Knot, the European Central Bank intends to raise interest rates by 0.5 percentage points in both February and March.
"In any case, we expect to gain half a percentage point in interest rates in February and March," Knot said in an interview with broadcaster WNL.
The ECB will continue to raise interest rates in the months that follow.
ECB President Christine Lagarde had already announced in December that key interest rates could rise by 0.5 percentage points for a while.
Knot now said that the course would not be finished any time soon.
Further steps in May and June would follow.
With the series of interest rate hikes, the euro central bank wants to bring the extremely high inflation back in the direction of the ECB target of two percent.
After years of ultra-loose monetary policy, interest rates have been rising since July 2022. They were last raised by 0.5 percentage points to 2.50 percent in December.
The deposit rate, which is currently considered the definitive rate on the financial markets and which banks receive from the central bank for parking excess funds, is now 2.0 percent.
In June 2022 it was still minus 0.5 percent, which meant penalty interest for the financial institutions.
Inflation in the euro zone fell more than expected in December.
Consumer prices rose by 9.2 percent compared to the same month last year, according to an initial estimate by the statistics office Eurostat.
In December, the ECB also announced that bond holdings would be gradually reduced from March 2023.
From then on, funds from expiring securities of its multi-trillion general purchase program APP will no longer be fully invested in the purchase of new bonds.
By the end of the second quarter of 2023, inventories are to be reduced by an average of 15 billion euros per month.
kko/Reuters/dpa
