Portugal finance minister questions ECB rate rise

Portugal’s Finance Minister Joaquim Miranda Sarmento said on Thursday that the European Central Bank’s latest interest rate increase, announced in response to inflation pressures linked to the war in the Middle East, was “not absolutely necessary”, a remark that matters for investors tracking euro zone policy signals and member state reactions.

Speaking to Portuguese reporters in Luxembourg on his way into a Eurogroup meeting, Sarmento said the ECB had been right to act in 2022 during the previous energy crisis, but argued the current situation is different. “I maintain my opinion that it might not have given this signal and it was not absolutely necessary, but I naturally respect the ECB’s mandate and independence,” he said.

The minister said the current crisis differs from the one triggered by Russia’s invasion of Ukraine in 2022, which pushed inflation to peak levels. He added that the euro zone is now in “a very different situation”, both in terms of inflation and the ECB’s own interest rate level.

Originally published at Eco.pt