ECB's Kazimir Sees June Rate Hike as Inevitable

A European Central Bank Governing Council member declared a rate hike at the bank's June meeting all but inevitable, amid persistent inflation pressures fueled by geopolitical tensions and rising energy costs.

Peter Kazimir, the Slovak policymaker, made the comments in an opinion piece on Monday, stating that higher oil and gas prices from the ongoing Iran conflict are poised to spread through the broader economy. "We remain firm in our approach," Kazimir said. "On this basis, policy tightening in June is all but inevitable." He noted the ECB is not locked into a fixed path but must prepare for prolonged broad-based price increases alongside weaker eurozone growth, as the region grapples with its role as a major energy importer.

The ECB held borrowing costs steady at 2.0% last Thursday, but officials signaled readiness to act at the June 10-11 gathering if inflation data worsens. ECB President Christine Lagarde indicated during the post-meeting press conference that the bank knows its direction on rates, moving away from prior assessments that policy was in a good place. Bundesbank President Joachim Nagel echoed this, saying a hike would be needed absent significant improvements...