ECB policymaker MAKHLOUF warned the central bank should be prepared to raise rates further if inflation "moves in the wrong direction." He flagged euro-area inflation stuck above 3% and growth running slightly stronger than pre-summer forecasts, calling that concerning. MAKHLOUF said next week’s decision "should not surprise anyone" and expects a small upward revision to this year’s growth forecast. He judged the deposit rate at 2.5% is not yet restrictive and said policy would likely become res

ECB policymaker MAKHLOUF warned the central bank should be prepared to raise rates further if inflation "moves in the wrong direction." He flagged euro-area inflation stuck above 3% and growth running slightly stronger than pre-summer forecasts, calling that concerning. MAKHLOUF said next week’s decision "should not surprise anyone" and expects a small upward revision to this year’s growth forecast. He judged the deposit rate at 2.5% is not yet restrictive and said policy would likely become restrictive only once rates exceed about 2.75%. He added it is unclear whether hikes beyond next week will be needed, endorsed a meeting-by-meeting approach without forward guidance, and said inflation expectations are well anchored with no sign of wage-driven second-round effects.