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ECB narrative holds, 2019 rate hike still possible – Nowotny

Euro zone growth is weaker than previously thought but the growth scenario outlined by the European Central Bank in December remains valid and a rate hike this year is still possible, Austrian policymaker Ewald Nowotny said.

Nowotny, known as a hawk on the ECB’s 25-member Governing Council, said that no big moves are likely at the January 24 policy meeting and even a decision on a new long-term funding facility for banks is not urgent.

“We were aware that there were risks but the basic story (outlined in December) still holds,” Nowotny told reporters. “At the January meeting we will not have a lot of new data. As we are data-based, I do not see that at the January meeting there will be major changes.”

When asked if he could still see an interest rate hike this year even though market expectations for a move have been pushed back into 2020, Nowotny said: “I can image it.”
Source: Reuters (Reporting by Balazs Koranyi and Tatiana Jancarikova; Editing by Francesco Canepa)

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