Hernández De Cos predicts high interest rates “for a long time”


The Governor of the Bank of Spain, Pablo Hernández de Cos, pointed out this Monday that high interest rates will continue “for a long time” to achieve the objective of inflation standing at 2%. These statements were made during his speech ‘The economic situation and monetary policy in Europe’ organized by Cercle Financer and promoted by the Societat Econòmica Barcelonesa d’Amics del País (Sebap), which was held at the Barcelona headquarters of CaixaBank.

However, De Cos has added that the forecasts of the body he chairs go through a gradual reduction in core inflation due to the improvement of supply chains and the moderation of demand. The head of the Bank of Spain has qualified that “the intensity of these effects is uncertain, as they may not be symmetrical to the upward effects.” On the other hand, he explained that the attention of the regulator “He is now addressing the wages response and business margins” and the possible appearance of second round effects.

“Inflation projections for March assume a gradual recovery of real wageswhich at the end of 2025 would be at a level similar to that of the first quarter of 2022″, he pointed out, adding that the current salary negotiations and the signed agreements point to increasing salary pressures.

In terms of margins, you have anticipated a compression because of moderation of demand, although the opposite effect could occur if demand is stronger than expected. Present at the governor’s speech were the president of Cercle Financer, Isidre Fainé; the president of Sebap, Miquel Roca, and the CEO of CaixaBank, Gonzálo Gortázar, among others.

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