(Bloomberg) -- European Central Bank Governing Council member Klaas Knot said he supports an interest-rate increase of as much as 75 basis points at next month’s meeting.
Most Read from Bloomberg
“The inflation problem in Europe at the moment is so big that I think our job is to raise interest rates every six weeks until the inflation picture stabilizes around 2%,” Knot, an ECB hawk, said in an interview with Dutch broadcaster NOS.
Knot said European central bankers are considering raising interest rates faster to tackle high inflation. He called for a rate hike of at least 50 basis points in September, echoing fellow Council member Robert Holzmann, who voiced concern that upward price pressures are becoming entrenched.
Three-Quarter-Point ECB Hike Should Be Debated, Holzmann Says
In the face of record inflation, the ECB raised rates for the first time since 2011 last month, opting for a half-point hike that was bigger than analysts expected. With data due next week set to show euro-area prices jumped by 9% in August -- another all-time high -- pressure is building for tougher action, akin to that deployed by the Fed.
Traders are currently assigning an almost 50% likelihood of the next rate move being more than 50 basis points. European bonds slumped Friday on the prospect of a three-quarter-point hike.
“We really need to focus on inflation and take the consequences for our economic activity for a while,” NOS cited Knot as saying.
Most Read from Bloomberg Businessweek
©2022 Bloomberg L.P.