European Central Bank Governing Council member Peter Kazimir from Slovak reinforced the hawkish bias on Monday, arguing that policymakers will likely need to raise interest rates at least once more and warning that a worsening energy shock could ultimately require even more tightening than markets currently anticipate. His remarks come just days after the ECB left policy unchanged while signaling that another move is likely at its September meeting as renewed Middle East tensions push oil and gas prices higher.
Kazimir said he “remain[s] of the view that at least one more hike will be needed as part of our measured adjustment to inflation risks,” adding that this would be justified “even if the situation improves somewhat.” He also set a high bar for changing that view, saying “very convincing” economic data and geopolitical developments would be needed over the coming weeks for him not to support a September rate increase. More importantly, Kazimir argued the ECB should act before higher energy costs feed through to broader inflation, warning that second-round effects “often form quietly” and that policymakers must “act before that point, not after.”
He also opened the door to a more aggressive tightening cycle if the energy shock intensifies. “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 said. That aligns with the ECB’s recent emphasis on monitoring whether higher energy prices evolve into broader and more persistent inflation pressures rather than treating them as temporary supply shocks. Kazimir added that “we did not surprise the markets in July, and we should not surprise them in September,” reinforcing the ECB’s preference for preparing markets ahead of major policy moves.
ECB Governing Council member Ante Žigman of Croatia echoed that cautious approach in a separate interview, saying uncertainty “remains high” and that the impact of the latest energy shock “will only be seen in the coming months.” He stressed that the “intensity and duration of the shock are crucial” and reiterated that future decisions would depend on incoming data and updated projections while keeping the ECB’s medium-term objective of inflation around 2%.
Together, the comments suggest policymakers remain firmly on course for another rate hike while leaving open the possibility of additional tightening should energy-driven inflation prove more persistent than currently expected.
