ECB policymakers see underlying price growth accelerating for another few months before a plateau, and a meaningful decline may not come before the autumn. (Reporting by Padraic Halpin; editing by Jason Neely and Mark Potter)
Messaging: padraic.halpin.thomsonreuters.com@reuters.net)) (Adds quote, details)
DUBLIN, April 20 (Reuters) - European Central Bank (ECB)
policymaker Klaas Knot is "not uncomfortable" with current
market expectations which envisage interest rates rising to
around 3.85% from 3% currently, the Dutch central banker told
the Irish Times in an interview.
The ECB is expected to raise rates for a seventh straight
meeting on May 4 in a bid to bring down stubbornly high euro
zone inflation, with policymakers converging on a 25-basis-point
hike, even if a larger move is not yet off the table, sources
with direct knowledge of the discussion have told Reuters.
"We are now in what I would call mildly restrictive
territory with policy rates, but inflation is not mild.
Inflation is still much too high," the newspaper on Thursday
quoted him as saying.
"Mildly restrictive territory will not be enough to counter
an underlying inflation rate that has been creeping up towards
6%. We need a sufficiently restrictive stance. Where is
sufficiently restrictive, I don't know, but clearly not where we
are today."
While euro zone inflation eased last month, underlying core
inflation is at a stubbornly high 5.7%, raising worries in
Frankfurt about the persistence of price pressures.
"It's too early to talk about a pause. For a pause, I would
really need to see a convincing reversal in underlying inflation
dynamics," Knot added.
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