Italian PM opposes ECB interest rate hike

Italian Prime Minister Giorgia Meloni has criticized the European Central Bank over repeated interest rate hikes, saying it was following a "simplistic" policy approach that could do more harm than good, Report informs referring to Reuters.

The ECB raised euro zone interest rates to their highest level in 22 years this month and said a ninth consecutive rate hike was all but guaranteed in July as it predicted inflation would stay above its 2% target through the end of 2025.

"It's right to decisively fight inflation but to many people the simplistic recipe of rate hikes followed by the ECB doesn't seem to be the right path," Meloni told parliament.

Rising rates make it more costly for Italy to service the euro zone's second largest debt pile, and Rome fears they will trigger another recession for what has been the bloc's most chronically sluggish economy since the launch of the euro.

Meloni, speaking to the Chamber of Deputies ahead of an EU summit in Brussels, said inflation was not being caused by an overheating European economy but by external factors such as the war in Ukraine which had fueled rising energy costs.

"We must consider the risk that the constant increases in interest rates hurt our economies more than inflation, that the medicine ends up doing more harm than the illness," she said.