ECB member: ‘I cannot imagine that we’ll talk about cuts yet’

It’s conceivable that the European Central Bank decides against cutting rates in 2024, says Robert Holzmann – Governor of the central bank of Austria.

Inflation remains a concern in the euro zone

In an interview with CNBC at the World Economic Forum in Davos on Monday, Holzmann said those who are expecting a rate cut in April will “deeply disappointed”.

His comment arrives shortly after inflation in the euro zone was reported at 2.9% for December – up significantly from 2.4% in the previous month. Much of that increase was related to energy prices.

I cannot imagine that we’ll talk about cuts yet. Everything we have seen in recent weeks points in the opposite direction. So, I may even foresee no cut at all this year.

The Euro Stoxx 50 has lost about 2.0% over the past thirty days.

Watch here: https://www.youtube.com/embed/NaMOQ1XYBxE?feature=oembed

Geopolitical tensions are rising fast

Holzmann does not see a possibility of an interest rate cut unless it’s evident that inflation is reliably declining towards the ECB’s 2.0% target.  

🔴 ECB'S PRESIDENT LAGARDE: I SEE EURO ZONE INFLATION AT 1.9% IN 2025.

— FinancialJuice (@financialjuice) January 11, 2024

The member of the Governing Council of the European Central Bank also cited the ongoing Israel-Hamas war and the related geopolitical tensions for his view on Monday.

Prices may increase, but it may also risk to change the way we do business, structural changes, which take longer, but which also have the danger of price changes in the future.

Also today, experts at Barclays lowered their expectations for the price of crude oil (average) this year from $93 a barrel to $85 as Invezz reported here.

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