.jpg)
2 hours ago
4
Article content
(Bloomberg) — The European Central Bank will have to raise interest rates at least one more time to ensure that inflation risks don’t spin out of control, according to Governing Council member Peter Kazimir.
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
SUBSCRIBE TO UNLOCK MORE ARTICLES
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
REGISTER / SIGN IN TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account
- Share your thoughts and join the conversation in the comments
- Enjoy additional articles per month
- Get email updates from your favourite authors
Sign In or Create an Account
or
Article content
Even a small improvement in the conflict in the Middle East won’t change the need for tighter policy settings, he wrote in a blog post on Monday. Kazimir added that an escalation of the war would warrant more increases.
Article content
Article content
“I remain of the view that at least one more hike will be needed as part of our measured adjustment to inflation risks,” said Kazimir, who also heads Slovakia’s central bank. “This is warranted even if the situation improves somewhat.”
Article content
Article content
“Should the situation escalate, with the price pressures becoming stronger and more persistent, we will need to tighten more over the next quarters than is currently expected,” he added.
Article content
By signing up you consent to receive the above newsletter from Postmedia Network Inc.
Article content
Kazimir’s remarks are the strongest signal yet that policymakers are prepared to raise rates in September, after they decided against delivering a second consecutive hike last week. Until then, a raft of fresh information and new projections will offer a better view of the damage to the euro-zone economy from continued fighting in the Middle East.
Article content
The Slovak argued that the ECB’s primary focus remains on how higher energy costs are affecting prices in the 21-nation bloc, and reiterated President Christine Lagarde’s analysis from last week that the “full inflationary impact of the energy shock has yet to play out.”
Article content
So-called second-round effects “rarely announce themselves” and “often form quietly,” he said. “By the time they are fully visible, they are costly to reverse. Our task is to act before that point, not after.”
Article content
A 25-basis-point hike in September is fully priced in financial markets after oil broke through $100 a barrel last week. Most economists also anticipate such a move. No one had anticipated action last week.
Article content
“We did not surprise the markets in July, and we should not surprise them in September,” Kazimir said. “Incoming data and geopolitical developments would need to be very convincing for me not to advocate another hike in September.”
Article content
—With assistance from Daniel Hornak.
Article content
English (US)