Kazimir: ECB Rate Hike Likely Needed Even With Improved Outlook

The European Central Bank (ECB) may still need to raise interest rates in September, even if economic conditions improve, according to Slovak central bank chief Peter Kazimir.

Kazimir, a policy hawk, stated that 'at least one more hike will be needed as part of our measured adjustment to inflation risks,' and this is true 'even if the situation improves somewhat.'

The ECB left interest rates unchanged last week but hinted at a rate hike in September due to rising oil and gas prices. Kazimir emphasized the need for preemptive action, saying that policymakers should act before second-round price impacts become evident.

'They often form quietly. By the time they are fully visible, they are costly to reverse,' Kazimir said.