Posted on July 26, 2022 Following last week’s 50bp rate hike and the latest statements from its members, the European Central Bank seems to have taken a more hawkish tone. Austrian Robert Holzmann commented that the Eurozone may have to accept a moderate recession, with the aim of curbing price increases if inflation expectations continue to rise. For his part, Martins Kazaks stated that the ECB should be open to a discussion on higher interest rate hikes for the next central bank meetings. The data from the IFO index of business confidence in Germany for the month of July was 88.6 points, considerably lower than market expectations (90.5 points) and the figure for the previous month (92.2 points), registering a new low since June 2020 due to fears of an economic recession due to rising energy prices and natural gas shortages. In relation to gas, in Europe the debate continues heatedly. Faced with the rejection of a large number of member states on the initial draft proposal for a 15% gas cut for all EU countries in the event of a cut in Russia, the leaders will examine the updated proposals in a special meeting Energy in the European Union. The challenge will be reaching agreement, although the updated draft allows exceptions for countries based on specific geographic or physical reasons, which could help find consensus. INFORMATIONTitleThe ECB adopts a more restrictive policy, after last week’s rate hike DescriptionAfter last week’s 50 bp rate hike and the latest statements from its members, the European Central Bank seems to have taken a more hawkish tone. Author GLOBALCAJA
The ECB adopts a more restrictive policy, after last week’s rate hike
