ECB's Villeroy: No Rate Hikes Till Mid-2019
The ECB announced last month that it will end net bond purchases this year, but also that interest rates will stay unchanged until "at least through the summer of 2019". Today, Francois Villeroy de Galhau (ECB Governing Council member and Bank of France Head) confirmed these plans of the European regulator. "Net asset purchases should end in December; the first interest rate rise could take place at the earliest through the summer of 2019 depending on the inflation outlook," the politician stated.
While Eurozone inflation has remained weak, higher oil prices, increasingly evident wage pressures and record employment suggest that prices will be moving up in the coming years, even if more slowly than the ECB had originally hoped. The euro's 5% fall against the US dollar since April is also helping the ECB as the weaker currency is increasing the cost of imports and boosting inflation.