ECB Hikes Risk Economic Growth Harm

ECB policymaker Gabriel Makhlouf warned that further rate hikes by the European Central Bank (ECB) could hurt economic growth. Makhlouf made this statement on a blog post on the Irish central bank's website, citing uncertainty in the outlook for inflation and economic growth.

The ECB raised borrowing costs on Thursday for the second time this year, and sources told Reuters that policymakers expect further policy tightening in the months ahead. A move is possible as early as October.

Makhlouf noted that there remains significant uncertainty to the outlook, particularly with regards to inflation. He stated that a drawn-out conflict in the Middle East risks keeping inflation elevated for a long period.