Makhlouf: Further Rate Hikes Could Damage Economic Growth

European Central Bank (ECB) policymaker Gabriel Makhlouf has expressed concerns that further interest rate hikes could harm economic growth. Speaking on a blog, Makhlouf noted that there remains significant uncertainty to the outlook for inflation and economic growth.

Makhlouf stated that the near-term driver of elevated inflation is energy costs, which are being kept high by the drawn-out conflict in the Middle East. He warned that raising interest rates too much could have real costs in terms of growth.

The ECB raised borrowing costs on Thursday for the second time this year, and sources suggest that policymakers expect further tightening in the months ahead.