ECB’s Kazaks Signals Rate Hike If Rising Oil Prices Push Inflation Expectations Higher

The European Central Bank may opt for an interest rate hike if the sustained rise in crude oil price raise energy costs and inflation expectations substantially, ECB Governing Council member and Bank of Latvia chief Martins Kazaks said on Thursday.

“Oil prices are higher and we are seeing that this is gradually starting to push inflation up, and if inflation expectations start to deteriorate, then the European Central Bank will be forced to raise interest rates,” Kazaks said in an interview to the Latvian public broadcaster LTV.