The European Central Bank will have to raise interest rates if the rate of inflation does not begin to slow by the end of this year. So says a member of the ECB’s Executive Board Jose Manuel Gonzalez-Paramo.
In a newspaper interview he said the “temporary” rise in inflation is due to raw materials prices which the ECB “hopes” will begin to fall. If not, rates will be put up so that inflation doesn’t “get out of control.”
Gonzalez-Paramo added: “The loss of credibility in anchoring inflation has very serious, negative consequences.”