[FR] Euroquestions #45 | ECB interest rate hike: What impact on inflation and growth?
Pierre Jaillet, associate researcher at the Jacques Delors Institute and the Institute for International and Strategic Relations (IRIS), is the guest on Euroquestions on Wednesday 20 July to analyse the context and potential effects on inflation and growth of the monetary policy measures that are expected to be decided on Thursday 21 July 2022. On that date, the European Central Bank is set to raise its key interest rates by +0.25% for the first time since 2011, as announced at the end of the Governing Council meeting on 8 June 2022. The ECB has also indicated its intention to end its net asset purchases as of 1 July.
According to François Villeroy de Galhau, Governor of the Banque de France, there is a ‘consensus’ on the issue within the ECB. However, some members of the Governing Council, such as Klaas Knot, Governor of the Dutch central bank, have expressed their support for a 50 basis point increase in July in view of the risks associated with higher-than-expected inflation. The ECB’s rate hike is also late and moderate compared to the measures already taken or announced by the US Federal Reserve or the Bank of England.
Beyond the decisions of 21 July, there is also the question of the prospects and possible consequences of a ‘normalisation’ of monetary policy after a period of more than ten years of low rates.
