ECB may hike again as Iran conflict lifts energy costs
The European Central Bank (ECB) is thinking about raising interest rates even more, mainly because fuel prices are climbing due to the Iran conflict.
ECB policymaker Martins Kazaks, who is also governor of Latvia's central bank, says they want to adjust rates gradually so that rising energy costs do not end up making everything else (like wages and shopping) more expensive.
The key rate just went up to 2.5%, and there could be another bump soon.
Eurozone inflation seen averaging 3.6% Q4
Inflation in the eurozone hit 3.3% in August, and it is expected to average around 3.6% in the final quarter of this year.
While Kazaks points out that the eurozone's economy is holding up pretty well, he warns that higher energy prices could still push up living costs and wages.
Even though wage growth has slowed a bit, the ECB is not ruling out more rate hikes if inflation keeps sticking around.
It is aiming to keep prices stable without hurting economic growth.