ECB Officials Urged to Exercise Caution on Rate Hikes Amid Inflation Risks

European Central Bank officials are weighing their next steps after raising borrowing costs twice since the outbreak of the pandemic, according to Bank of Greece Governor Yannis Stournaras. In a Bloomberg TV interview in Dublin, Stournaras emphasized the need for caution when addressing rising inflation risks.

The governor pointed out that despite higher inflation, there have been no significant wage-related effects so far, but he cautioned that this trend could change due to repeated supply shocks and strong demand driven by fiscal expansion. Additionally, a surge in artificial intelligence investment is also contributing to the ongoing vigilance required to monitor inflation.

Stournaras urged ECB officials not to rush into further action, but rather remain alert to potential changes in the market.