ECB Eyes More Interest Rate Hikes Amid War-Driven Inflation Fears
European Central Bank (ECB) policymakers are anticipating further policy tightening in the coming months to combat rising inflation, which is being fueled by a war-driven surge in gas and oil prices. According to two sources, ECB officials believe more interest rate hikes may be necessary to prevent inflation from spreading throughout the economy.
The ECB raised borrowing costs for the second time this year on Thursday, warning that price pressures could persist, leading to bets on additional rate hikes. Policymakers are increasingly concerned about inflation after a sharp increase in gas and oil prices in recent months.
A move to raise interest rates again could come as soon as October 29 at the ECB's next meeting, but this would depend on incoming data and developments in Iran. However, ECB President Christine Lagarde has stated that she cannot predict what the next move will be and reiterated the bank's mantra of 'meeting-by-meeting', 'data-dependent' decisions.