MILANO – The rate hike may be nearing its end. The governor of the Bank of Italy reiterated this Ignatius Viscospeaking at a meeting of theSpy in Milan. “We are close to the level where we stop rate hikes,” she said. “I think we are close to the level at which we can stop”, then we must be “prudent in guiding the level of rates in line with the trend of the economy”, she added. At the same time, he remarked, the ECB must be ready to move in the event of new shocks: “As regards the future, it will be necessary to be open to the possibility of moving in the event of new unexpected shocks on consumer prices, the probability of which cannot be considered nothing, but not even particularly high today,” he said.
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“Reassuring Signs”
The governor said he was optimistic about inflation. “There are signs that reassure us compared to a year ago: overall inflation is down, especially for the price of energy products”, said Visco. “Now inflation expectations are around 2%, we are stable” and objectively “medium-term rates are restrictive”, he underlined again. demand” of goods and services in general and also of liquidity “are more or less the same: we need to see the levels of supply and demand well”, added Visco.
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According to the governor, the moves of the European Central Bank they were in some ways inevitable but times now seem to have changed. In recent years – said Visco – also due to the effect of the increase in energy prices “there has been a drop in income and the weakest need to be protected. In some European countries, such as Germany and the Netherlands for example, a strong increase in wages and it was inevitable to try to contain inflation very quickly, at times I even said too much” inflation through rate hikes, but rates “have gone where they were supposed to go”, explained the governor of the Bank of Italy .