European Central Bank official signals inflation and interest rate hike
Stating that inflation remains high in the Eurozone and Lithuania, Simkus stated that borrowing costs could rise if oil prices increase.
European Central Bank (ECB) Governing Council member Simkus stated that inflation rates in the Eurozone and Lithuania are still very high, signaling that borrowing costs could be increased further if oil prices exceed $100 per barrel.
Inflation and Borrowing Costs
ECB Governing Council member Simkus stated in an interview with LRT that inflation is at very high levels in both the Eurozone and Lithuania.
Officials plan to increase borrowing costs to bring inflation, which hovers around 3 percent, under control, and the next step is expected to be taken next month.
Interest Rate Hike Decisions and Future Expectations
These statements came immediately after the ECB announced its expected quarter-point rate hike, the second since the outbreak of the Middle East war.
Simkus emphasized that Thursday's rate hike decision was not a direct commitment to the future and stated that communication should be handled responsibly.
Energy Prices and Targeted Levels
Investors expect three more interest rate hikes from the European Central Bank as oil prices climb above $100 per barrel.
Simkus emphasized that energy is the main driver of the rise in inflation and that it matters how long these high levels will persist.