ECB must include a 75 bp rate hike in September in its options, says Müller | Photo credits: Istock
ALPBACH, Austria Aug 30 (Reuters) – The European Central Bank (ECB) is to include an interest rate hike of 75 basis points among the options considered for its next monetary policy meeting in the face of exceptionally high inflation, Bank of Estonia Governor Madis Müller said on Tuesday.
Inflation in the euro zone, whose figures for the current month will be published on Wednesday, reached an all-time high in July at 8.9% over one year, leading several ECB officials to plead in favor of a further rise in the cost of credit of 50 basis points after the first rise in 11 years in July.
“I think a 75 basis point hike should be among the options for September given that the inflation outlook hasn’t improved,” he told Reuters on the sidelines of a conference call.
“However, I come to this meeting with an open mind and want to both see the new projections and hear the arguments of my colleagues,” he added.
The current level of inflation being four times higher than the 2% target set by the European Central Bank, Madis Müller believes that the institution must be firm in this area.
“We must not be too timid in policy guidance because inflation has been too high for too long and we are still well below the neutral rate,” he said.
The next ECB monetary policy meeting is scheduled for September 8. (Report Balazs Koranyi; French version Claude Chendjou, edited by Sophie Louet)