Signal of Additional Rate Hike from the European Central Bank
Central Bank of Ireland Governor Makhlouf stated that further interest rate hikes should remain on the table if inflation follows an undesirable trajectory.
Central Bank of Ireland Governor Gabriel Makhlouf noted that if inflation moves in the wrong direction, the European Central Bank should be prepared to continue raising interest rates.
Inflation Developments and Concern
Expressing his concern over inflation in the Eurozone remaining above 3 percent, Central Bank of Ireland Governor Gabriel Makhlouf emphasized that risks in price increases are being monitored closely.
Growth Expectations and GDP
Pointing out that economic growth in the region is stronger than pre-summer projections, Makhlouf stated that he expects the European Central Bank to revise its 2026 growth forecast upward.
Interest Rates and Restrictive Level
Stating that the current benchmark deposit rate is not at a level to slow down economic activity, the official expressed that the restrictive territory would begin above the 2.75 percent level.
Market Expectations and Inflation Target
While it was recalled that annual inflation rose to 3.3 percent in August due to the impact of energy prices, it was stated that markets continue to price in future periods.