Despite the risk of recession, the European Central Bank (ECB) may have to raise interest rates sharply again at its next interest rate meeting in September. The inflation outlook has not improved since the July meeting, said central bank director Isabel Schnabel. “In July we opted for a 50 basis point hike given the inflation outlook. At the moment I don’t think that outlook has fundamentally changed.” The ECB has switched to making decisions from meeting to meeting based on incoming data. “Looking at the most recent data, I would say that the worries we had in July have not been allayed.” The next ECB interest rate meeting is scheduled for September 8th. The German economist Schnabel is responsible for the important department of market operations on the ECB’s executive committee and thus for the concrete implementation of monetary policy. Inflation in the currency area climbed to a new record of 8.9 percent in July. This means that inflation is now more than four times as high as the actual target of the monetary watchdogs, who are aiming for two percent inflation for the economy.
ECB – Schnabel signals further rate hike – economy
