ECB open to raising rates past July, account shows

FRANKFURT (Reuters) – The European Central Bank may need to continue raising interest rates beyond this month to bring inflation back to target, ECB policymakers said at their last meeting.

The ECB raised its interest rates to their highest level in 22 years at the June 14-15 meeting and said a ninth consecutive rate hike was all but guaranteed in July as it predicted inflation would stay above its 2% target through the end of 2025.

An account of the June meeting published by the ECB on Thursday showed rate increases might continue at the central bank’s following gathering in September.

“It was seen as essential to communicate that monetary policy had still more ground to cover to bring inflation back to target in a timely manner,” the ECB said. “The view was held that the Governing Council could consider increasing interest rates beyond July, if necessary.”

Data since that meeting showed the euro zone economy losing steam and inflation in the bloc falling for a third straight month in June.

But so called core prices, such as those for services, have been rising stubbornly fast and aren’t expected to relent soon, leaving the door open to a further rate hike by the ECB hike in September.

Still, policymakers agreed to follow a “data-dependent approach” and “meeting-by-meeting optionality” to decide on rates beyond July.

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