Nicosia, Cyprus. Central Bank of Cyprus governor Christodoulos Patsalides said the European Central Bank is increasingly likely to raise interest rates in June, while stressing any move would remain strictly data-dependent and not signal a broader tightening cycle.
Comments in MNI interview cited by Bloomberg
Patsalides made the remarks in an interview with financial news agency MNI, which was subsequently cited in coverage by Bloomberg.
Rising oil prices and uncertainty cited as inflation risks
He pointed to a deteriorating backdrop marked by rising oil prices and heightened uncertainty, which he said are increasing inflation risks across the euro area.
“As things stand, things are worsening,” he said.
“So, things are pointing to a raise in interest rates,” Patsalides added.
Emphasis on meeting-by-meeting, data-dependent policy
Patsalides said the ECB has not pre-committed to any specific policy path, emphasising its meeting-by-meeting approach to decision-making.
“The ECB is data dependent and it is meeting-by-meeting policy decision making,” he said.
“We do not pre-commit to any policy rises for the future,” Patsalides added.
Energy price surge under assessment
He said policymakers are assessing whether the surge in energy prices represents a temporary supply shock or could feed into broader inflation dynamics through demand.
“What we are observing is a rising price, and this is evident,” he said.
How do you think rising energy prices could affect inflation and interest rate decisions in the euro area?
