ECB-POLICY/IMF (PIX):ECB must keep rates at or near 4% through 2024 to get inflation down -IMF
Real wages also have some way to go catch up with inflation and this could also keep up the price pressure, fund saysInflation has had a large impact on the price of groceries. Rapid wage growth in the euro zone could keep inflation elevated longer and the European Central Bank should hold interest rates at or near record highs through next year to extinguish price pressures, the International Monetary Fund said on Wednesday.
“Monetary policy is appropriately tight and needs to remain so in 2024,” Mr Kammer told a news conference. “For all intents and purposes, should be held at that level or close to that level throughout 2024.”Mr Kammer warned the ECB against cutting rates too soon because that would require even more costly policy tightening later on.
While the IMF sees price growth back at target in 2025, an exceptionally tight labour market could push this date back to 2026, it warned. "Risks remain skewed toward more persistent inflation," the IMF said in a report."Under adverse assumptions, this could delay reaching inflation targets to 2026."
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