Bank of Italy: watch out for rate hikes

For the Bank of Italy, the risks for financial stability remain high due to the persistent geopolitical instability, strong inflationary pressures and uncertainty about the economic trend. A situation not dissimilar from that of other countries experiencing the same international context, implicitly specifies Palazzo Koch in his report, but adds that in the future, in order to consolidate the trend towards deficit and public debt reduction in Italy, also in the light of the increase in interest rates, “it will be necessary to achieve a significant increase in the growth potential and a structural improvement in the primary balance”. Words that came just after the Def case broke out in Parliament with the majority failing to get the budget variance approved. An event which, however, did not accentuate the fibrillation on the markets of recent days because the spread has even narrowed since Thursday’s close. Some concern emerges about the worsening economy in 2023.