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ECB’s Schnabel Says Rates Must Rise Further Despite Downturn

Sept. 22, 2022, 5:24 AM

The European Central Bank must push on with interest-rate increases despite the souring outlook for the euro-zone economy , according to Executive Board member Isabel Schnabel.

While the 19-member currency bloc may stagnate rather than slip into a recession, Germany is less likely to avoid a contraction, Schnabel said in an interview with German website t-online published Thursday.

Inflation -- already the fastest since the euro was introduced and almost five times the ECB’s 2% target -- may not have peaked, she said.

Source: Bloomberg Economics

“A looming downturn would have a dampening effect on inflation,” Schnabel said. “Of course, we ...