European Central Bank (ECB) Governing Council Member Klaas Knot estimated on Monday that the ECB will have to take another «significant interest rate step» in October, although he did not speculate about the size of the hike. He added that other «significant moves» are to be expected in 2023 in order to bring inflation back to target.
Knot stated inflation should go down in 2024, «but the question is how fast,» warning that second-round wage effects are going to become more pronounced. He noted that markets «seem to underestimate» the upwards inflation risks. Knot also remarked that the ECB will not move to quantitative tightening for at least another two meetings.