ECB Executive Director Martin Kocher said in an interview that the European economy has shown more resilience than expected, which means that if monetary policy needs to be further tightened, the European economy will be able to withstand higher interest rates. “Fortunately, since the summer, we have seen some signs that the European economy is gaining momentum,” said the Bank of Austria governor, pointing specifically to improved confidence indicators and industrial recovery. However, he also stated that “the economic situation is still fragile” and added that “necessary interest rate adjustment measures are being taken while avoiding unnecessary adjustments.” “As I said before, interest rate hikes always dampen aggregate demand, which is of course unpleasant,” Kocher said. “If we can reach our 2% inflation target without further rate hikes, that would be the best of course.”

ECB Executive Director Martin Kocher said in an interview that the European economy has shown more resilience than expected, which means that if monetary policy needs to be further tightened, the European economy will be able to withstand higher interest rates. “Fortunately, since the summer, we have seen some signs that the European economy is gaining momentum,” said the Bank of Austria governor, pointing specifically to improved confidence indicators and industrial recovery. However, he also stated that “the economic situation is still fragile” and added that “necessary interest rate adjustment measures are being taken while avoiding unnecessary adjustments.” “As I said before, interest rate hikes always dampen aggregate demand, which is of course unpleasant,” Kocher said. “If we can reach our 2% inflation target without further rate hikes, that would be the best of course.”