An ECB Governing Council member signals growing inflation concerns but rules out rate hikes without clear evidence of second-round effects.
European Central Bank Governing Council member Christodoulos Patsalides stated that current inflation remains aligned with ECB projections, with no immediate need for rate hikes. However, he warned that persistent high oil prices are increasing inflation risks over time.
Patsalides noted that inflation expectations remain anchored, and there is little evidence of second-round effects or excessive wage growth. Yet, he emphasized that prolonged energy price shocks could broaden inflationary pressures, making pre-emptive action more likely.
While the September policy decision remains data-dependent, Patsalides suggested the balance is shifting toward potential tightening as upside risks accumulate. He stressed that policymakers cannot rely solely on current yield curves for decisions.