Responding to the decision to maintain interest rates at record high levels, ETUC General Secretary Esther Lynch said:
“High interest rates mean ordinary people are paying for an inflation crisis fueled by corporate profiteering.
“The policy is designed to penalise workers whose purchasing power declined significantly during the recent inflation surge and which are only beginning to catch up now.
“High interest rates increase costs for ordinary people who depend on credit to pay for essential things like a car to get to work, a fridge or even increasingly household bills.
“High interest also risk dragging us into another avoidable recession by holding back economic growth and they are having only a marginal effect on inflation because that has been driven primarily by profits.
“Analysis of historical evidence by the IMF has shown that nominal wages catching up with inflation has not been at the root of spiralling inflation and this is supported by the ECB analysis, even if some hawks on the ECB Council still won’t accept it.
“The ECB should accept that there is no wage-price spiral and cut interest rates before this misguided policy does any more damage.”
