The probability that the European Central Bank’s next move on interest rates could be a hike has increased, according to Estonian central bank Governor Madis Muller.
Speaking at a conference in Vilnius on Wednesday, Muller said policymakers must closely assess the recent surge in energy prices and determine whether its impact on inflation will be temporary or more persistent.
He explained that the ECB needs to evaluate how rising energy costs may influence inflation dynamics before making any decisions on monetary policy.
During a panel discussion, Muller noted that while the central bank should avoid rushing into policy changes, recent developments have increased the likelihood that the ECB’s next rate move could be upward rather than downward.
Despite the growing probability of a rate hike, Muller emphasized that there is still no need for the ECB to act quickly. According to him, policymakers should carefully analyze incoming economic data before adjusting interest rates.
