In an interview published Monday, outgoing European Central Bank Vice President Luis de Guindos urged his colleagues to proceed with caution when deciding whether to raise interest rates next month, as economic growth is expected to slow.
Investors anticipate that the ECB will increase its key interest rate at its next meeting on June 10-11, with one or two further hikes expected before next spring, in an effort to curb inflation fueled by rising energy prices due to the conflict involving Iran.
De Guindos's term ends at the close of May, so he will not be present at the June meeting. However, he called for a cautious approach.
"I believe the data on economic growth in the coming weeks will not look good," he stated. "Therefore, I would advocate for prudence: the impact on economic growth will become more evident in the coming weeks. Furthermore, we need a clearer understanding of this conflict."
Other policymakers have indicated that a rate hike next month is likely unless the conflict is resolved and energy prices fall significantly.
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