The European Central Bank may need to raise interest rates at its June meeting because of increased inflation risks, Central Bank of Cyprus Governor and ECB Governing Council member Christodoulos Patsalides told Bloomberg.
“So far, things are deteriorating,” he said. “So things point to an increase in interest rates.”
Patsalides said persistent price increases raise the risk of feeding into core inflation, while stressing that a rate increase in June would not necessarily mean the ECB is entering a new cycle of monetary policy tightening.
He noted that there are “some scenarios”, including a swift end to the conflict in the Middle East, under which the ECB would not need to raise rates.
Markets and economists expect ECB policymakers to raise interest rates in June.
