Two more ECB rate-setters flag support for July rate hike

Two more top policymakers at the European Central Bank said they favoured starting to hike interest rates as soon as July.

In a speech delivered on Thursday, Irish central bank boss, Gabriel Makhlouf, said that the ECB's bond buying should be halted in June or July and that official interest rates should be hiked soon afterwards.

So should the ECB stop its net asset purchases in June, a rate hike could follow in July, it was understood.

Nonetheless, Makhlouf went on to say that "this isn't forward guidance: the calibration of our policies should remain data-dependent and we should maintain vigilance, optionality and flexibility as core principles in our decision-making."

The central banker also said that the disinflationary dynamics the euro area had experienced over the preceding decade were "very unlikely" to be repeated so that it was now necessary "to act".

Earlier the same day, Slovenian central bank governor, Peter Kazimir, who also sat on the ECB's governing council, had also flagged his support for a July rate hike.

Their remarks came against a backdrop of increased market chatter regarding a possible decline in the euro towards parity with the US dollar by year-end 2022.