ECB Official Says September Rate Hike Will Be Insufficient

Governing Council member Gediminas Simkus stated that a planned interest rate hike in September will be insufficient to return inflation to the 2% target. Speaking to Econostream Media, Simkus indicated that while a hike is very likely based on current data, the overall inflationary environment has strengthened.

Simkus attributed the rising consumer price outlook to a stronger-than-expected European economy, increased prices for agricultural commodities, and a rise in natural gas futures. He argued that these factors necessitate an upward shift in the interest-rate path to maintain medium-term price stability.

Addressing the rise in bond yields, Simkus characterized the trend as a general market development and stated he is not particularly worried about the shift.