ECB's Schnabel: We will continue to raise interest rates until core inflation falls

The European Central Bank will continue to raise borrowing costs until it sees core inflation falling sustainably, ECB executive board member Isabel Schnabel said on Tuesday, adding that market expectations of a rate cut were misplaced. Schnabel backed the ECB’s decision last week to slow the pace of rate hikes but said it would continue until it saw a sustained decline in core prices, which typically exclude food and energy because they are wildly volatile. “Based on today’s data, there is no doubt that we need to do more to bring inflation back to our 2% target in time. We will raise rates decisively until it is clear that core inflation is also falling sustainably,” Schnabel said at an event in Frankfurt. She added that interest rates are likely to remain high for an extended period and that the rate cuts expected by some market participants this year are “very unlikely.”