Europe economy more robust than anticipated, ECB council member says
He suggests it will be able to withstand higher interest rates if further tightening is needed
[VIENNA] Europe’s economy is proving more resilient than expected, European Central Bank governing council member Martin Kocher said in an interview with Austrian newspaper Kurier.
He suggested it will be able to withstand higher interest rates if further tightening is needed.
“We’ve fortunately been seeing stronger signals in the European economy for somewhat more momentum since the summer,” the Austrian central bank chief said, highlighting improving sentiment indicators and a recovery in industry.
Still, “the economic situation remains fragile”, he said, adding that “necessary rate moves are being taken, while unnecessary ones are (being) avoided”.
“As I have said, rate hikes always dampen aggregate demand and are, of course, unpleasant,” he noted. “Naturally, it is preferable if we can achieve the 2 per cent target without further rate hikes.”
The ECB has already raised borrowing costs twice and is widely expected to do so again, with markets counting on another three moves in this tightening cycle.
Kocher, who is typically one of the more hawkish governing council members, stayed non-committal on what is next.
“Given the high level of uncertainty and the price shock resulting from the situation in the Middle East, we will reassess the situation at every meeting,” he said. BLOOMBERG
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