Visco says pause in interest rate hikes 'not far off'

(ANSA) - ROME, JUL 13 - The European Central Bank (ECB) can be expected to pause its policy of raising interest rates to combat high inflation before the end of the year, Bank of Italy governor Ignazio Visco said on Thursday.
    "Once we have reached the right level" of rates "it must be maintained for a while, and I do not think we are very far off", Visco said in an interview to Skygtg24.
    The central bank chief, who is also a member of the governing council and general council of the ECB, said the pause could be expected "certainly before the end of the year".
    Visco also said that decisions on rates are taken on a case-by-case basis at each meeting.
    The ECB's policy of raising interest rates to fight inflation has drawn strong criticism in Italy, including from Premier Giorgia Meloni and Deputy Premiers Antonio Tajani and Matteo Salvini.
    However, Visco denied that there is a systemic problem or problem of financial stability arising from the rise in interest rates and the consequent increase in payments of variable-rate mortgages.
    "Household debt in Italy is the lowest in Europe," he added.
    Adjustable-rate mortgages "only represent a third (of the total)," said Visco, adding that those taken out since the start of 2023 are capped.
    "There are measures underway that will help those most in need," continued the governor, pointing out that borrowers with variable-rate mortgages "should have perceived that an increase was possible".
    "There needs to be more information and willingness to understand the risk," he said.
    On the proposal to establish a minimum wage in Italy, the Bank of Italy chief said it should be introduced for workers not covered by collective employment contracts, refusing however to "get into the level of remuneration, which should not be too high but should be established by those responsible".
    "In Italy it is said there is already a contractual wage, but many (workers) are not covered by these contracts," Visco told Skytg24.
    "I believe it is these people" who must have a "reasonable wage", he added.
    Earlier this month opposition parties registered a joint bill in the Lower House introducing a minimum wage of nine euros gross per hour "to guarantee adequate earnings for workers, especially those in conditions of poverty in part because of inflation".
    Confindustria has said it would not be against such a move, adding that it would not affect the industrial association as its collective contracts are all above the nine-euro mark.
    "If we want to talk about a minimum wage with a nine-euro threshold, it's not a problem for Confindustria," President Carlo Bonomi told the assembly of the Assolombarda section.
    "All our contracts are above that. If we take the metalworkers' contract, for example, the price is 11 euros.
    "It is not true that industry doesn't pay well. It pays what is right. There is no veto. On the contrary," he said. (ANSA).