European Central Bank Vice President Luis de Guindos said a 50 basis point rate hike could be the new norm in the short term.
ECB Vice President Luis de Guindos, in an interview with Le Monde newspaper, stated that a 50 basis point increase in interest rates for a while to control inflation might be the ‘short-term norm.’
“The situation will only worsen if we do nothing because inflation is one of the major factors behind the current recession,” Guindos said.
Expressing his concern about underestimating the persistence of inflation, Guindos predicted that inflation could fall to 7 percent by mid-2023.
In the last meeting of 2022, the ECB joined the Central Banks that slowed down the rate of increase in interest rates, and this time continued with a rise of 50 basis points after the 75 basis point interest rate hikes.
