If further rate hikes are necessary in 2023 to reduce inflation growth, the ECB will likely proceed with less aggressive tightening. This was announced by Gabriel Makhlouf, a member of the Governing Council of the European Central Bank. The next meeting of the ECB’s Governing Council is imminent: markets are betting on a squeeze of 50-75 basis points at the next meeting, scheduled for December 15.

Christine Lagarde’s ECB announced a new maximum rate hike of +75 basis points on October 27th, after a historic one, the first such hike since the birth of the Euro, last September 8th.

The interest rate on the main refinancing facility, marginal lending facility and deposit facility will be increased to 2.00%, 2.25% and 1.50% respectively.

“As we go into next year, if rates go up, they will likely go up in small increments,” Ireland’s central banker Makhlouf said in an interview with Ireland’s Sunday Independent newspaper. “Look what we’ve been up to since then. The economy of the euro area can assess how much more we need to do and the speed at which this is happening … By the second half of next year, we believe we will see lower inflation”.