ECB Governing Council member Klaas Knot said, “a swift normalization of interest rates is an essential first phase, and some front-loading should not be excluded. The broadening and deepening of our inflation problem generates the need to act forcefully.”
Knot saw upside risks to inflation, including from higher food and energy prices, a weaker euro, copious budget spending and rising expectations. He added that even if the slowdown in the economy were to materialize, “this in itself is unlikely to bring inflation back to our objective over the medium term.”
Knot said earlier last week that a rate hike of at least 50bps is needed next week.
