The European Central Bank should raise interest rates by 50 basis points at each of its next four meetings as inflation is proving to be stubborn, Austrian central bank chief Robert Holzmann told German business daily Handelsblatt.
The ECB has raised rates by 3 percentage points since July and flagged a 50 basis point increase for March. It has left the door open to subsequent moves, which it said would be decided on "meeting by meeting" and be "data dependent."
Holzmann, an outspoken conservative - or hawk in policy terms - however said that based on current trends, he would favour 50 basis point moves in March, May, June and July. "I expect it to take a very long time for inflation to come down," Holzmann was quoted on Monday as saying. "My hope is that within the next 12 months we will have reached the peak of interest rates."
The four steps advocated by Holzmann would take the deposit rate to 4.5%, well above the 4% peak rate priced in by markets, a level no other policymaker has so far advocated in public.
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