ECB’s Rehn says rate changes will come ‘gradually’

by | Mar 11, 2022

Share this article

The European Central Bank’s key interest rates will be adjusted gradually when they begin to change, said ECB policymaker and Finnish central bank chief Olli Rehn.
“Any adjustments to the key ECB interest rates will take place some time after the end of the APP net purchases and will be gradual,” Rehn said in Helsinki, referring to the bank’s bond-buying Asset Purchase Programme.

He added that the ECB’s decision to accelerate its exit from extraordinary stimulus was a compromise decision and left the bank with plenty of room to manoeuvre in case the outlook changes.

“It was a compromise and we all supported the decision unanimously, and I defend the decision,” said Rehn, who argued for caution in the weeks leading up to the meeting. “We maintain and in fact increase the freedom of manoeuvre.”

 

“In this kind of pervasive uncertainty… it’s always worthwhile to move in small, prudent steps and wait until the fog clears,” he said.

The ECB now guides markets for an interest rate increase “some time” after bond purchases end and Rehn said this could mean weeks or months, Reuters reported.

Share this article

Related articles

UK inflation hits 40-year high of 10.1%

UK inflation hits 40-year high of 10.1%

Higher food prices helped push up inflation in September, official data showed on Wednesday, to a record 10.1%. According to the Office for National Statistics, the consumer price index rose by 10.1% in the 12 months to September, compared to August's rate of 9.9%....

Reports of delay to bond sale ‘inaccurate’ – BoE

Reports of delay to bond sale ‘inaccurate’ – BoE

The Bank of England appeared to deny reports on Tuesday that it wanted to delay selling billions of pounds of government bonds. The central bank acquired £838bn of gilts during its quantitative easing programme. It had intended to start selling them on 6 October, but...

Trending articles

IFA Talk logo

IFA Talk is our flagship podcast, designed to fit perfectly into your busy life, bringing the latest insight, analysis, news and interviews to you, wherever you are.

IFA Talk Podcast - listen to the latest episode