The European Central Bank may need to raise interest rates again if wages, profits or new supply snags boost inflation, ECB board member Isabel Schnabel said in an interview published on Friday.
Report informs via Reuters that the ECB raised borrowing costs to record highs last month to rein in prices in the euro area, which are still growing at more than twice its 2% target after the bloc was hit by higher energy prices and supply snags last year.
Schnabel said a recent moderation in inflation, which fell to its lowest level in two years at 4.3% in September, was "encouraging" but risks abounded, from stronger-than-expected wages or profits to new disruption to supply.
"I still see upside risks to inflation," Schnabel told Croatian newspaper Jutarnji list. "If they materialise, further interest rate hikes could be necessary at some point."
The ECB pushed the rate it pays on banks' deposits to the highest in its 25-year history at 4.0% last month in a bid to cool lending and, with it, consumption and investment.