ZURICH: The European Central Bank could begin increasing interest rates before ending its bond purchasing programme, ECB policymaker Robert Holzmann said in an interview with Swiss newspaper NZZ, saying a rate change would be possible already in summer.
With euro zone inflation rising to record highs in recent months, the ECB has given up on a pledge not to raise rates this year and several policymakers are openly advocating an end to bond purchases this year, previously stated as a prerequisite for any rate hike.
However, Holzmann said it was possible for the ECB to veer away from the policy guidance that any interest rate increase would only come "shortly after" quantitative easing ends, and move to change interest rates first.
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"When it comes to the interest rate outlook, the ECB has always signalled that an interest rate hike should not take place until shortly after the bond purchases have ended," Holzmann, the hawkish head of Austria's central bank, said in the interview published on Wednesday. "But it would also be possible to take a first interest rate step in the summer before the end of the purchases and a second at the end of the year. I would favour that."
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