Euro zone may be facing recession but rate hikes necessary, ECB’s Makhlouf says

Posted on October 18, 2022Comments Off on Euro zone may be facing recession but rate hikes necessary, ECB’s Makhlouf says

© Reuters. Birds are seen over the skyline as the sun rises in Frankfurt, Germany, September 22, 2022. REUTERS/Kai Pfaffenbach

NICOSIA (Reuters) – The euro zone economy may be facing a recession but rate hikes remain absolutely necessary because persistently high inflation is damaging the economy and stability, European Central Bank policymaker Gabriel Makhlouf said on Tuesday.

“The euro area is facing a difficult combination of high inflation and low economic growth, including the possibility of a technical recession,” Makhlouf, Ireland’s central bank governor said in Cyprus.

“History teaches us that these issues will only be exacerbated if we delay action and raising interest rates is absolutely necessary as persistent inflation is damaging to macroeconomic stability.”

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Comments Off on Euro zone may be facing recession but rate hikes necessary, ECB’s Makhlouf says