DSGV President Schleweis: “Latest interest rate hike demonstrates the ECB’s determination

“The ECB has remained true to its announcements and has once again demonstrated determination with today’s interest rate hike,” commented Helmut Schleweis, President of the German Savings Banks Association (DSGV) the central bank’s decision. He added that the inflation rate remained far away from the ECB's target for the euro area, and that the core rate had stabilised at a high level. Another interest rate move had therefore been necessary. Schleweis praised the small steps taken by the central bank in view of the fact that the interest rate level was already quite significant. In future, the ECB should be even more cautious. 

The previous interest rate moves had already started to take effect, emphasised the DSGV President. Prices had become more stable, and decelerating effects in terms of money supply growth and aggregate demand were already quite significant.

However, Schleweis drew attention to the fact that the quick turnaround in interest rates had not yet fully arrived in the real economy. The ECB should now monitor the impact of its interest rate hikes. While a pause seemed possible and advisable, it did not have to be the end to interest rate hikes. Schleweis: “If the data in autumn suggest that there is need for further action, the ECB may have to make another move. The central should now adopt a more flexible position and keep all options for action open in order not to overdo the unique historic turnaround in interest rates.”