ECB may increase rates for the first time in over a decade

A member of the ECB’s governing council told CNBC Friday that the central bank will likely raise rates for the first time in more than a decade.

The ECB has been criticised for taking a less forceful monetary policy approach than other central banks. Expectations of a rate hike have risen in recent months as inflation has continued to rise, with market participants now predicting at least four rate hikes by the end of the year.

“We are on the right path,” Joachim Nagel, president of Germany’s Bundesbank and one of the ECB’s more hawkish members, told CNBC’s Annette Weisbach.

“In our very important meeting in March we decided to end our net asset purchases and in the June meeting, dependent on data, we will decide to stop maybe — and I say this because this data are speaking a very convincing language here — that we stop our purchases and afterwards I believe we will see rather soon the first rate hikes,” he said.

His remarks suggest that the first rate hike could occur in July after the ECB has discussed updated economic predictions released the previous month.