ECB Member Primoz Dolenc Advocates September Interest Rate Hike
European Central Bank member Primoz Dolenc argues for a September interest rate increase to 2.5% to combat inflation driven by energy costs and economic growth.
Governing Council member Primoz Dolenc stated there is a strong case for raising interest rates in September to safeguard the inflation target of the European Central Bank. Speaking at the Federal Reserve's annual economic symposium in Jackson Hole, Dolenc identified stronger-than-expected economic growth and elevated energy costs, fueled by conflict in the Middle East, as the primary drivers for further tightening.
The bank is currently debating whether to follow its June quarter-point hike with another increase to 2.5% next month. Dolenc is joined in this position by Executive Board member Isabel Schnabel and Latvia's Martins Kazaks, who both support further tightening to return price gains to target.
Policymakers are specifically focused on preventing energy price shocks from triggering second-round effects, such as persistent wage gains. Dolenc noted that data available by December will provide the necessary clarity on the medium-term inflation path to inform future decisions.
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