BERLIN (Reuters) – The European Central Bank (ECB) expects interest rates to stay at their current level through the summer of next year and the scaling back of economic stimulus measures to be gradual, board member Benoit Coeure told Germany’s Taggespiegel.
The comments are in line with the bank’s previous assertion that it is comfortable with market expectations for an interest rate rise in the final quarter of 2019.
“We expect interest rates to stay at the current level at least through the summer of 2019. But we have already started to reduce our net asset purchases and anticipate them ending after the end of December,” Coeure told the newspaper in an interview released on Sunday ahead of publication on Monday.
With inflation picking up, the ECB has been curbing stimulus for months and plans to end its 2.6 trillion euro bond purchase scheme in December.
Coeure said that ample monetary stimulus would still be needed to achieve the bank’s euro zone inflation target of below, but close to, 2 percent.
“Price pressures are gradually picking up. But this doesn’t happen in one day,” Coeure said.
Asked about Brexit, Coeure said that the ECB has to be prepared for all eventualities.
“Likewise, the financial sector should prepare for the worst: a no-deal Brexit,” he said, adding that he hopes the EU and Britain can reach a deal that allows an orderly Brexit.
(Reporting by Madeline Chambers; Editing by David Goodman)