In recent months, the European Central Bank has been criticized for only taking rising inflation into account and doing nothing against it. Robert Holzmann, Governor of the Austrian National Bank and a member of the Governing Council of the ECB, indicated when interest rates could start to rise.
“We can reduce asset purchases and when that happens, it will signal to markets that interest rates could be raised,” Holzmann told a news conference on Wednesday. “In an extreme variant, it would be possible to stop asset purchases completely next year, and so interest rates could rise at the end of 2022, a similar time as the US Fed will raise its rates for the third time,” he added.
According to the governor of the Austrian National Bank, it is natural for the European Central Bank to react with some delay behind the Fed. The ECB estimates inflation in the euro area at 3.2 percent next year, well above its 2% target. In 2023 and 2024, inflation should reach 1.8 percent. At the same time, the ECB is aware of the risk that the rate of price growth could remain above the 2% target in these years as well.