Several ECB advisers suggest a rise of 50 basis points in December

MADRID, 5 Dic.

Several ECB advisers suggest a rise of 50 basis points in December


As the next monetary policy meeting of the Governing Council of the European Central Bank (ECB) approaches, which will take place on December 15, new members of the decision-making body of the issuing institution express a greater preference for slowing down the rate of increases , suggesting a rise of half a percentage point instead of the 75 basis points of the last two decisions of the entity.

Along these lines, Gabriel Makhlouf, Governor of the Central Bank of Ireland, indicated on Monday that an increase of 50 basis points in interest rates at the December meeting represents "the minimum necessary" to advance on the path necessary to return the inflation to the 2% target.

"It is premature to talk about the end point of policy rates amid the current levels of uncertainty," declared the Irish central banker, for whom the justification for the ECB's balance sheet expansion "has ended, and it is time to consider reduce its size".

The Governing Council of the ECB has undertaken a rise of 200 basis points in euro area interest rates in its last three meetings, with a first increase of 50 basis points in July, followed by separate increases of 75 basis points in the conclaves of September and October.

In an interview with Rádio Renascença, for his part, the governor of the Bank of Portugal, Mario Centeno, has admitted that futures point to the ECB adopting a less aggressive rise in its next meeting than in the previous ones.

"If we look at future rates today, based on the decisions expected by the ECB, we have a lower increase for December than in the last two meetings. In other words, the markets expect this lower increase," he declared, referring to a rate hike of less than 75 basis points.

The statements by both ECB advisers come less than a day after Bank of France Governor François Villeroy de Galhau expressed his preference for raising rates by half a percentage point.

"I think it is desirable to bring the (deposit) rates to 2%, that is, an increase of 0.5 or 50 basis points," he said in an interview with LCI television, noting that this would mark the end of the first half of the game and underlining that "in the second half of the game, the rates will continue to increase", although the increases will be more flexible and at a slower pace.

At the meeting of the ECB Governing Council on December 15, the governors of the national central banks of Spain, Belgium, Slovenia and Finland will not be able to vote, according to the institution's vote rotation.