ECB's Kazimir Sees at Least One More Hike, Warns Oil Shock Could Force More

European Central Bank Governing Council member Peter Kazimir said the bank will likely need to raise interest rates at least once more. He also warned that a worsening energy shock could force even more tightening than markets currently expect.

"I remain of the view that at least one more hike will be needed as part of our measured adjustment to inflation risks," Kazimir told reporters on Monday. "Even if the situation improves somewhat, that step is justified." He added that only "very convincing" economic data and geopolitical developments over the coming weeks would change his view before the ECB's September meeting.

The Slovak central banker also flagged a more aggressive path if the energy shock intensifies. "Should the situation escalate, with the price pressures becoming stronger and more persistent, we will need to tighten more over the next quarters than is currently expected," he said. The ECB left policy unchanged last week but signaled another move in September, after renewed Middle East tensions pushed oil and gas prices higher. Kazimir said the bank should act before higher energy costs feed through to broader inflation. Second-round effects "often form quietly," he warned.