ECB Vows Action on Inflation as Eurozone Rates Hit 3%

European Central Bank (ECB) Governing Council member Martins Kazaks warned that the bank cannot afford to let inflation rates above target persist. In a Bloomberg interview, Kazaks described the current inflation environment as 'somewhat uncomfortable' and signaled the ECB's readiness to tighten further if necessary.

Eurozone inflation is currently running at approximately 3%, a full percentage point above the ECB's 2% goal. Despite this, markets are already pricing in a near-certain 25-basis-point increase to the deposit rate at the September policy meeting.

Kazaks emphasized that it remains premature to determine exact next steps, but stressed a data-dependent approach. He stated unequivocally that the ECB 'won't hesitate to act if needed' to bring inflation back to 2%.