Inflation and getting a grip on the Netherlands – FM.nl
The causes of the increasingly expensive life lie outside our country.
The Netherlands and the eurozone are probably not yet off the high. The increased likelihood will last for more than a year. An interest rate hike from the European Central Bank (ECB) is expected in the fourth quarter of this year.
That is what President Klaas Knot of De Nederlandsche Bank (DNB) says. The past has risen to the highest level in decades in recent months. The fact that life has become much more expensive is due to a sharp rise in energy prices, but also, for example, the supermarket products have increased in price.
The DNB chairman points out that the causes of the high outgoings lie outside the Netherlands. He does not yet identify a wage-price spiral, with companies raising wages for an extra strong boost and thus boosting the wages even more. That is why Knot assumes that the high prices will come to an end at some point.
Raising interest rates is considered the means of combating highs. According to Knot, the ECB has more tools at its disposal than just jacking up its own interest rates. First, the ECB’s support programs must be phased out. Measures are already being taken and, according to the financing on the financial markets, that has increased somewhat.
On the basis of all current data, a first interest rate step of 0.25 percent in the fourth quarter. Then another one will arise in the spring of 2023, he thinks.
ECB President Christine Lagarde already hinted on Thursday that an interest rate hike may not be long in coming. This is that the situation here is different than in the United States, where interest rates will be scheduled.