European Central Bank member pushes for quick action to raise interest rates

The European Central Bank must move quickly to raise interest rates in order to tackle high inflation, according to the head of Finland’s central bank.

His comments come as the US Federal Reserve and the Bank of England tightening cycle intensify pressure on the European Central Bank to follow suit.

“We have a struggle of pressures in monetary policy,” Olli Rehn, governor of the Bank of Finland and member of the European Central Bank’s board of directors, told CNBC’s Silvia Amaro on Friday.

“We are almost between a rock and a hard place, so on the one hand, we have to ensure that the recovery continues. On the other hand, we have to prevent the entrenchment of high inflation expectations and their reflection in the labor market,” said Rehn.

He continued, “In other words, we have to avoid the effects of the second round. Therefore, in my view, we must move relatively quickly to zero and continue our gradual process of gradual monetary policy normalization as we did.”

“Of course, all this on the condition that Russia’s war in Ukraine does not escalate and intensify significantly, which could hamper all prospects and economic recovery.”

Like many central banks around the world, the European Central Bank seeks to steer the eurozone economy through high inflation exacerbated by Russia’s unprovoked attack on Ukraine.

This is a breaking news story and will be updated soon.

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