ECB policymakers signal higher probability of a rate hike in September amid rising energy costs and persistent inflation pressures.
European Central Bank officials warned that oil prices near $100 per barrel could fuel inflation, increasing upside risks to the price outlook. The comments reinforce a cautious but hawkish stance ahead of the September policy meeting, where additional inflation data will be reviewed.
Policymakers, including Lithuania’s Gediminas Šimkus and Finland’s Olli Rehn, stressed that inflationary pressures remain elevated despite no signs of second-round effects. Šimkus noted the probability of a rate hike is still higher than a hold, while Rehn urged calm but acknowledged the energy crisis is not over.
The ECB’s Governing Council has left the door open for further tightening if inflation expectations worsen. Markets will focus on upcoming data releases before the next decision.