UPDATE 1-ECB's Knot: unclear if rates should rise by 25 or 50 basis points in May

(Adds detail and background) AMSTERDAM, April 7 (Reuters) -

European Central Bank (ECB) governing council member Klaas Knot said it was unclear to him if a rates rise of 50 basis points (bps) was necessary in May, or if a scale back to a lower 25 basis points was a possibility. "The question is do we still need to take a further 50 bps rise, just like we did last time we hiked the rate, or can we already scale back to smaller steps of 25 bps," Knot, who is also the Dutch central bank chief, told the NRC newspaper. "We shall have to decide that during the ECB May meeting (...) a lot more economic data will be out by then."

The ECB's standard guidance is that decisions are taken on a meeting by meeting basis, but if inflation develops along the baseline seen in the March economic projections, then another interest rate hike in May will be appropriate.
(Reporting by Bart Meijer and Benoit Van Overstraeten; Editing by Sudip Kar-Gupta)

Reuters

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