Gediminas Simkus states probability of an ECB rate increase exceeds maintaining current levels amid persistent inflation.
A European Central Bank Governing Council member indicated the likelihood of a near-term interest rate hike is greater than keeping rates unchanged. Gediminas Simkus, head of Lithuania’s central bank, dismissed concerns over second-round inflation effects but acknowledged elevated inflation risks, including from $100 oil prices.
Simkus noted inflation remains above the ECB’s 2% target and is expected to stay elevated. He emphasized the need for additional inflation data before September’s decision, avoiding rushed moves. Markets had previously priced in a potential pause, though recent commentary suggests lingering hawkish sentiment.
The Euro (EUR) edged 0.1% higher against the USD following the remarks, trading near 1.3325.