(Bloomberg) -- Betting that the European Central Bank cuts interest rates in the first half of next year would be a mistake, according to Governing Council member Martins Kazaks.Most Read from BloombergMGM Resorts Hackers Broke In After Tricking IT Service DeskUltra-Rich Buy Ultra-Luxury Counseling to Get Kids Into HarvardBillionaire Case Bets on Superfast Jet, AI Beyond Silicon ValleyCanada Postpones Trade Mission to India With Tensions On RiseDisney Talks on ABC Sale Heat Up as Byron Allen Mak
Wage growth in the euro zone hasn’t yet peaked and it’s unclear how quickly underlying inflation will retreat, the head of Latvia’s central bank said. Last week’s decision to lift borrowing costs for a 10th straight time puts the ECB more solidly on track to reach its 2% target in 2025, but it’s too soon to exclude another hike.
Projections presented last week show that inflation in the 20-member euro area will take another two years to reach 2%, even as price pressures are set to slow sharply in the coming months. The economy is seen returning to quarterly growth rates of 0.4% in 2024 after stagnating for most of 2023. “While I’m comfortable with where rates are at the moment, if necessary we will take the right decisions,” said Kazaks. “To say we’re at the peak — I don’t think we can do that.”
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