# ECB’s Centeno says interest rate close to peaking if no new shocks Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-01-06 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: ECB Rates Should Soon Hit Peak Amid Inflation Fight Meta Description: ECB official Mario Centeno predicts interest rates will rise until inflation reaches 2%, in efforts to control inflation amid external shocks in international URL: https://financedigest.com/ecbs-centeno-says-interest-rate-close-to-peaking-if-no-new-shockshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-01-06t112825z1lynxmpej050bqrtroptp4ecb-policy-centeno-1736814612674-compressed.jpg) LISBON (Reuters) – The European Central Bank’s key interest rates should soon hit their peak amid efforts to bring down inflation, unless new external shocks emerge, ECB Governing Council member Mario Centeno said on Friday. He told a conference that interest rates will rise until the ECB thinks inflation can be brought down to its medium-term target of 2% “as quickly as possible”. “We are on the way to achieving it… but we cannot hesitate in this [process” of controlling](https://www.financedigest.com/sdl-helps-lifeplus-engage-with-customers-across-50-countries-and-gain-control-of-translation-costs-and-processes.html "SDL Helps Lifeplus Engage with Customers across 50 Countries and Gain Control of Translation Costs and Processes") inflation, he said. The ECB raised the [rate it pays](https://www.financedigest.com/beat-the-exchange-rate-and-buy-that-dream-holiday-home-by-paying-in-pounds.html "Beat the exchange rate and buy that dream holiday home – by paying in pounds! ") on bank deposits by 50 basis points to 2% on Dec. 15, moderating its policy-tightening [push after two consecutive 75 bps hikes](https://www.financedigest.com/central-banks-ease-off-on-rate-hike-push-in-october.html "Central banks ease off on rate hike push in October"). ECB rates “should be reaching levels very close to the highest values” of the [current cycle of monetary policy](https://www.financedigest.com/yen-trims-gains-as-possible-next-boj-governor-says-current-policy-appropriate.html "Yen trims gains as possible next BOJ governor says current policy appropriate") normalisation, “if we are not subject to more exogenous shocks in international and energy prices”, Centeno said. Annual consumer price growth in the [euro zone](https://www.financedigest.com/euro-zone-inflation-seen-just-above-ecbs-target-in-2025-poll-shows.html "Euro zone inflation seen just above ECB’s target in 2025, poll shows") slowed to 9.2% in December from 10.1% in November, data from Eurostat showed on Friday, below the 9.7% forecast in a Reuters poll. Centeno welcomed the four-month low reading, singling out a significant slowdown in Germany. He [expected “some resistance” at the beginning of this year as automatic updates to wage contracts](https://www.financedigest.com/contract-caterer-compass-expects-2023-profit-growth-to-top-20.html "Contract caterer Compass expects 2023 profit growth to top 20%") kick in. In January and [February there may be a kind of plateau in the inflation figure](https://www.financedigest.com/french-inflation-revised-upwards-in-february-to-7-3-final-figures.html "French inflation revised upwards in February to 7.3% – final figures"), but the expectations are that it will come down in line with the December ECB forecasts,” he said. The ECB forecast a gradual decline in average [inflation but only approaching its target](https://www.financedigest.com/the-mouse-that-roared-new-zealand-and-the-worlds-2-inflation-target.html "The mouse that roared: New Zealand and the world’s 2% inflation target") within three years. (Reporting by Sergio Goncalves, editing by Andrei Khalip and John Stonestreet) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---