Central Bank governor says future policy decisions must be ‘data-dependent’ via IrishTimesBiz
Central Bank of Ireland governor Gabriel Makhlouf said"profit margins of businesses, particularly the smaller businesses with less scope to pass on cost increases to customers, will suffer due to the size of their energy bills". Photograph: Nick BradshawCentral Bank of Ireland governor Gabriel Makhlouf signalled on Wednesday that while the European Central Bank is on track to increase interest rates by a further 0.
“We need to continue to increase rates at our meeting next week – by taking a similar step to our December decisions – and also at our March meeting, although our future policy decisions need to continue to be data-dependent given the prevailing uncertainty,” Mr Makhlouf said in an address to the Oireachtas Finance Committee.
The ECB increased its deposit and main lending rates each by half a percentage point in December, to 2 per cent and 2.5 per cent, respectively. “Raising the policy rate also signals our commitment to price stability. It sends a clear message that we will not allow inflation to stay above 2 per cent and helps to contain inflation expectations, guarding against the emergence of self-reinforcing inflation dynamics and tackling the risk of a persistent increase in inflation expectations.”
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