ECB policymaker KAZAKS said the bank may have to raise borrowing costs to a
level that curbs economic activity to control inflation. He said the Iran war’s
energy shock is proving more persistent and the ECB must do everything to
prevent elevated oil and gas prices from spilling into broader inflation. He
added the stronger the economy, the easier it is to raise rates, citing
Germany’s unexpectedly strong Q2 growth. KAZAKS said “2.5% is nothing magical”
and that, if necessary, the ECB will of course go higher. He gave no timing
guidance but said “all meetings are live meetings.”
