DUBLIN Reuters - The European Central Bank will likely increase interest rates by smaller increments next year if further hikes are needed, governing council member Gabriel Makhlouf was quoted as saying on Sunday.
The ECB began to push up rates at its fastest pace on record in July, and markets are betting on a 50-75 basis-point increase at the next December 15 meeting. Makhlouf said this week that his mind is open on the size of the hike.
The last meeting of the policymakers on Thursday showed that they cannot agree on their ultimate destination or pace, despite the fact that they have been adamant that rates need to be increased to help lower inflation.
The likelihood is that if the rates go up, they'll go up by smaller increments, according to Makhlouf, the Irish central bank chief, told Ireland's Sunday Independent newspaper in an interview.
We'll have to see what's happening to the euro area economy so we can judge how much more we need to do. And over what pace do we need to do it? We're going to see inflation drop by the second half of next year.