European Central Bank governing council member Martin Kocher stated that the bank will need to raise borrowing costs again if new projections confirm heightened price pressures in the euro area. “In the near term, upside risks to inflation have intensified once more,” the Austrian central bank governor said in an emailed statement on Tuesday. “If the ECB’s new forecasts confirm this, I believe another rate hike will be necessary in the near future.”

With inflation persisting above target due to the Iran conflict, ECB policymakers are expected to implement a 25-basis-point rate increase on September 10. Investors anticipate further monetary tightening beyond this month, which could push borrowing costs to levels that begin to strain the economy. Officials discussed the need for a “mildly restrictive” monetary policy stance during their July meeting.

“We must prevent inflation from remaining above the 2% target over the medium term,” Kocher emphasized. “The key is a comprehensive analysis of the data. Therefore, we will continue to make decisions on a meeting-by-meeting basis and act when necessary to ensure price stability.”