ECB officials are prepared to raise rates in September unless the euro-area
inflation outlook improves markedly, sources said. Citing current information
and the economic impact of the Middle East conflict, officials judge another
~100 bps may be needed to curb price pressures, though no decision has been
taken. The stance could shift quickly if a peace deal is reached or a deeper
recession materializes, consistent with the ECB’s meeting-by-meeting approach.
President Lagarde signaled the possibility on Thursday, saying some Governing
Council members had asked whether to raise rates and that the bank is closely
watching incoming data in the coming weeks.
