Hike rates

ECB will raise rates next year at the latest, Rehn tells newspaper

The euro sculpture is seen in front of the headquarters of the European Central Bank in Frankfurt October 4, 2006. REUTERS/Kai Pfaffenbach

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HELSINKI, Feb 4 (Reuters) – It would make sense for the European Central Bank to raise its key rate no later than next year, ECB policymaker and head of Finland’s central bank Olli Rehn said on Friday.

“If there are no setbacks in the pandemic or the geopolitical situation, it would make sense for the ECB to raise its key rate no later than next year,” he told the Helsingin Sanomat newspaper in a statement. interview.

Rehn, who sits on the ECB’s Governing Council, also said the ECB will ensure inflation remains subdued over the medium term.

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In a reversal of policy, the ECB on Thursday acknowledged rising inflation risks and opened the door to a possible rate hike this year. Read more

Rehn said the board of governors would be in a better position to assess inflationary pressures, particularly the impact of Russian power politics on energy prices, when it meets in March.

“However, I don’t think the tensions in Ukraine and Europe would ease quickly, but instead we should prepare for a long war of nerves from Russia,” he said.

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Reporting by Anne Kauranen; edited by John Stonestreet, William Maclean

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