ECB lessens rate hike expectations over energy prices
The Vice President of the European Central Bank, Boris Vujčić, spoke about the impact of rising energy prices on the expectations for interest rate hikes in the Eurozone, explaining that market bets heavily depend on increases in oil and gas prices. However, policymakers consider a broader range of economic data when making decisions. He confirmed that continued high energy prices could further drive inflation and weaken economic growth, particularly by reducing household income and spending. He also noted that a harsh autumn and winter might exacerbate these effects. Additionally, he pointed out that the Eurozone has managed to reduce its dependence on natural gas, which lowers the risks associated with declining storage levels. The economy has shown greater resilience than expected, thanks to strong exports and private consumption.
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