According to a quick estimate by Statistics Austria, inflation rose to 7.2 percent in April – after 6.8 percent in March. Price drivers are primarily energy costs, i.e. fuel, electricity and gas.
The European Central Bank (ECB) is therefore under increasing pressure to deviate from its zero interest rate policy in order to counteract inflation. Central bank chief Robert Holzmann spoke in the ZIB2 interview “For quick action”, the interest rates should therefore be increased “in the summer, maybe in the autumn and if necessary in December”.
However, according to Holzmann, the ECB is not yet in default, because it have with the expiration of Bond purchase programs have already responded. You have to be “very careful” in doing so, because it is also important not to choke off the upswing or the economy with an interest rate hike. Because “inflation cannot be fought by the ECB alone, inflation is imported from abroad,” said Holzmann, referring to the internationally high energy prices. And the ECB can do very little against this. But if prices don’t continue to rise, inflation should fall again.
If interest rates rise, so will borrowers. In residential construction in particular, where many loans have variable interest rates, it could therefore increase personal bankruptcies. “But I don’t expect this to reach dramatic proportions,” says Holzmann.