ECB official Isabel Schnabel signals need for further interest rate hikes

European Central Bank interest rate hike inflation risks Isabel Schnabel monetary policy

Isabel Schnabel, a member of the European Central Bank (ECB) Executive Board, has signaled that further interest rate hikes may be necessary to combat persistent inflation. In recent interviews, Schnabel warned that inflation is likely to remain above the 2% target for an extended period, driven primarily by high energy costs and the ongoing conflict in the Middle East.

She emphasized that the ECB must act preemptively to prevent second-round inflation effects from becoming entrenched in wages and services. Waiting for these pressures to fully manifest in wage growth could leave policymakers behind the curve, potentially requiring even more aggressive tightening later.

Despite these risks, the eurozone economy has shown unexpected resilience. Factors such as robust aggregate demand, fiscal policy, increased defense spending, and the global growth in artificial intelligence have supported economic activity. Markets are currently pricing in a 25 basis point increase for the upcoming September meeting, which would bring the deposit rate to 2.5%.

Entities

Bloomberg · European Central Bank · Eurozone · Germany · Isabel Schnabel · Middle East · Reuters

Claims

What the coverage asserts, and how many sources carry each claim.

[● 3 SOURCES] Inflation is unlikely to return to the target in the medium term at current policy rates. economytoday.sigmalive.com · www.capital.gr · www.newmoney.gr
[● 7 SOURCES] Inflation is likely to exceed 2% for a protracted period due to high energy costs. economytoday.sigmalive.com · www.capital.gr · www.newmoney.gr · www.actionforex.com · www.businessdaily.gr · +2 more
[● 3 SOURCES] The Eurozone economy grew by 0.4% in the second quarter. www.capital.gr · zpravy.kurzy.cz · capital.es
[● 3 SOURCES] Further monetary tightening will be necessary. economytoday.sigmalive.com · www.capital.gr · www.newmoney.gr
[● 10 SOURCES] Investors have almost fully priced in a 25 basis point increase, bringing the deposit rate to 2.5%. economytoday.sigmalive.com · www.capital.gr · www.newmoney.gr · www.actionforex.com · zpravy.kurzy.cz · +5 more
[● 16 SOURCES] Inflation is likely to stay above 2% for an extended period due to high energy costs. capital.es · www.it-boltwise.de · www.actionforex.com · zpravy.kurzy.cz · www.poslovni.hr · +11 more
[● 10 SOURCES] At the current policy rate, inflation is unlikely to return to target over the medium term, and therefore further tightening will be necessary. capital.es · www.it-boltwise.de · www.actionforex.com · zpravy.kurzy.cz · www.poslovni.hr · +5 more
[● 16 SOURCES] The resilience of the eurozone economy and the conflict in the Middle East pose inflation risks. capital.es · www.it-boltwise.de · www.actionforex.com · zpravy.kurzy.cz · www.poslovni.hr · +11 more
[● 4 SOURCES] Insiders suggest the ECB may raise interest rates from 2.25% to 2.50% in September. www.cash.ch · www.poslovni.hr · vijesti.hrt.hr · www.vz.lt
[● 4 SOURCES] Low natural gas storage levels in Europe present a significant risk to inflation. capital.es · www.vz.lt · zpravy.kurzy.cz · www.cnn.gr
[● 3 SOURCES] Economic growth is being supported by fiscal policy, defense spending, and AI development. capital.es · zpravy.kurzy.cz · www.insider.gr
[● 11 SOURCES] Waiting for inflationary pressures to feed fully into wages would risk leaving policymakers behind the curve. capital.es · www.actionforex.com · www.poslovni.hr · vijesti.hrt.hr · www.vz.lt · +6 more