ECB Vows to Act on Second-Round Inflation if Energy Prices Persist

European Central Bank (ECB) policymaker Gabriel Makhlouf has stated that if high energy prices feed through to other areas and cause second-round inflation effects, interest rates will have to be raised again. Speaking in an interview with national broadcaster RTE on September 23, Makhlouf noted that while inflation is currently above the ECB's target, there are no signs of these effects materializing so far.

Makhlouf emphasized that if high energy prices persist and begin to impact other areas, the ECB will have to take action to meet its target. This comes after the ECB raised interest rates for the second time this year, with Makhlouf cautioning earlier in the month that raising rates 'a great deal more' risks damaging economic growth.