The ‘number two’ of the European Central Bank, the Spanish Luis de Guindos, assures that the entity sees general inflation moderating sharply in the middle of the year to around 6% (from the 8.5% it would have been in February , according to the advance published by Eurostat), although it is warned that the pressure will continue on the core. The rate that excludes energy and unprocessed food from its calculation “is going to be more stable in its behavior” for which he assures that the ECB has its focus on it. This rise in has to do, among other things, with the fact that the central bank is projecting a rise in wages this year of more than 5% for the region as a whole.
We will bring interest rates to the level that is compatible with CUNEF). The entity, has had an impact, will guarantee that this convergence towards 2% of the CPI occurs in a “stable” manner and has recalled that the change in monetary policy is producing effects in the form of a tightening of financing conditions and a reduction in the demand.
“We will raise 0.50 in March (the official rates) and later we will see the data”, especially when the final data and the aggregate of inflation are made public and it is known how the underlying is. The central bank will be attentive to what happens with the prices of services and non-energy industrial goods. Simultaneously, the entity will adjust the size of its balance. We try to prevent inflation expectations from becoming unanchored in the financial market that the ECB will be able to bring inflation to 2%.
Asked by the students about the upward trend in the price of money, he was blunt: “I think that in the next 3, 4, 5 years we will not return to negative rates”, given that this was an exceptional situation (the one that lasted decade after the financial crisis with the price of the euro at record lows) and now there is excess inflation.
The return on deposits will rise
Regarding the transfer of the rate hike to the remuneration of deposits, Luis de Guindos has pointed out that this process is part of the monetary normalization that is taking place and has shown himself “convinced that in the coming weeks and months the remuneration of deposits will be produced”. In addition, he has explained that the fact that up to now the banks are hardly making progress in this sense is not due to a lack of competition, but because “there is a lot of liquidity in the markets and the banks do not need to compete for deposits”. However, the pressure of other products will also favor this process.
Also regarding the sector, the vice-president of the ECB has defended that European banks are not currently a source of risk or vulnerability for financial stability, given that there has not been a credit bubble as in the past, nor has there been a skyrocketing evolution of the Real estate and liquidity levels are also different from those of the last crisis. “I think the main risk can occur in high-risk investment funds or hedge funds,” he has sentenced.
The vice-president of the ECB has pointed out that in the first quarter of this year the Eurozone will have positive growth as a whole, so the possibility of a technical recession “vanishes”, thanks to the significant fall in energy prices, especially gas, which was a kind of supervening tax. In addition, the issuer verified that the bottlenecks that affected world trade have been relaxed, the confidence indicators have improved; and the countries of the region have been pleasantly surprised by employment, which has endured.
From Ferrovial: the registered office of a company is “symbolic”
Asked about another of the week’s topics, Ferrovial’s announcement that it is transferring its headquarters from Madrid to the Netherlands, De Guindos stressed that he does not comment on national politics, although he has recorded the words of the Bank’s president Central European, Christine Lagarde, who in an interview with Antena 3 stressed that it would be good to have a single capital market in Europe. “The relocations of the registered office occur constantly in Europe”, has pointed out the vice president of the entity, who has also considered that the company’s address has a “relative importance” and is something more “symbolic”, since the most outstanding It is the level of employment and activity that it generates in the country. He also recalled that the Netherlands also lost the oil company Shell, which moved its headquarters to London.