ECB’s Schnabel says interest rates must rise further despite recession prediction

The ECB is walking what Vice President Luis de Guindos this week called a “fine line” as officials agree on the need to tackle inflation but risk worsening Europe’s already deteriorating growth prospects if they raise rates too much or too quickly. Picture: Alex Kraus/Bloomberg

The European Central Bank must push on with interest-rate increases despite the souring outlook for the euro-zone economy, according to Executive Board member Isabel Schnabel.

While the 19-member currency bloc may stagnate rather than slip into a recession, Germany is less likely to avoid a contraction, Schnabel said in an interview with German website t-online published Thursday.