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HomeLatest NewsHernández De Cos predicted high interest rates "for a long time"

Hernández De Cos predicted high interest rates “for a long time”

Date: March 2, 2024 Time: 05:59:05

The governor of the Bank of Spain, Pablo Hernández de Cos, pointed out this Monday that high interest rates will continue “for a long time” to achieve the objective of inflation standing at 2%. These demonstrations were made during his speech ‘The economic situation and monetary policy in Europe’ organized by the Cercle Financer and promoted by the Societat Econòmica Barcelonesa d’Amics del País (Sebap), which was held at the Barcelona headquarters of CaixaBank.

However, De Cos has added that the forecasts of the organization that they preside call for a gradual reduction of the underlying insufficiency due to the improvement of supply chains and the moderation of demand. The head of the Bank of Spain has qualified that “the intensity of these effects is uncertain, as they may not be symmetrical to the upward effects.” On the other hand, he explained that the regulator’s attention “is now turning to the response of wages and business margins” and the possible appearance of second-round effects.

“The inflation projections for March assumed a gradual recovery of real wages, which by the end of 2025 would be at a level similar to the first quarter of 2022,” he pointed out, adding that the current wage negotiations and the signed agreements point to to increasing wage pressures.

In terms of margins, he has anticipated a squeeze due to subdued demand, although he could see the opposite effect if demand is stronger than expected. Present at the governor’s speech were the president of Cercle Financer, Isidre Fainé; the president of Sebap, Miquel Roca, and the CEO of CaixaBank, Gonzálo Gortázar, among others.

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Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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