ECB Could Still Hike Rates in September as Energy Price Drop Fails to Quell Inflation Fears
Updated
Updated · Bloomberg · Jun 30
ECB Could Still Hike Rates in September as Energy Price Drop Fails to Quell Inflation Fears
1 articles · Updated · Bloomberg · Jun 30
Summary
September is still a live meeting for an ECB rate hike, Apollo chief economist Torsten Slok said, even after a substantial fall in energy prices since the bank’s last meeting.
Months of earlier energy-cost increases could still feed through into food and services prices, leaving the ECB exposed to second-round inflation effects.
Falling fuel prices alone may not be enough because companies could keep lifting wages, a dynamic Slok said risks triggering a wage-price spiral.
That leaves the ECB balancing easing headline energy pressure against the possibility that underlying inflation stays sticky into the autumn.