German Bundesbank chief Axel Weber says the European Central Bank will stop using 'code words' to signal interest rate changes when the current tightening cycle ends.
Weber, a leading member of the ECB's governing council, told the Financial Times that the bank would abandon phases like 'strong vigilance', which was used to indicate that interest rates would rise.
For ordinary people, or politicians, code words were 'like using a foreign language,' Weber admitted to the FT, though he added that they could be useful when rates were being raised.
Code words 'cannot replace a deeper analysis of economic and monetary developments,' he said. But Weber said the ECB would not release minutes from its interest rate-setting meetings, as the US Federal Reserve and the Bank of England do.
Meanwhile, Weber suggested that the interest rate cycle had some distance left to run. 'What is pretty clear at the moment is that we are in a stronger than previously expected recovery,' Weber said.
'If necessary we will also have to move into a territory that is portrayed as being restrictive, if that is needed to control inflation,' said Weber. He said the euro zone was growing faster than its 'potential' growth rate - the speed at which economies can expand without triggering excessive inflationary pressures. 'The current cycle of interest rate hikes has not reached its end,' he added.
The ECB is expected to raise interest rates to 4% at its June meeting, and many economist now expect at least one more rise this year.
