Why does ECB Governing Council member Gediminas Simkus believe the September rate hike will be insufficient to bring inflation back to target?

Simkus states that 'all the data currently available lead me to think that it’s very likely that we will hike, and that this September hike is not going to be enough,' citing the rise in natural gas futures, higher prices for agricultural commodities, and a stronger-than-expected European economy as factors shifting the consumer price outlook upward; he concludes that 'this should lead to projections that would require the interest-rate path to move up a bit in order to keep medium-term inflation at 2%,' and emphasizes that 'overall the inflationary environment has strengthened, making the case for a hike pretty clear.'

What specific economic developments does Simkus identify as contributing to a strengthening inflationary environment in the euro area?

Simkus identifies three specific developments: 'the rise in natural gas futures,' 'higher prices for agricultural commodities,' and 'a stronger than expected economy in Europe,' all of which, according to him, indicate that 'the outlook for consumer prices is shifting higher' and collectively mean that 'overall the inflationary environment has strengthened, making the case for a hike pretty clear.'

ECB September Rate Hike Insufficient, Simkus Says

Sep 1, 2026

ECB Governing Council member Simkus stated the September rate hike won't suffice for inflation targets, citing rising natural gas futures and agricultural commodity prices.

bloomberg

2026-09-01

ECB September Rate Hike Insufficient, Simkus Says

ECB September Rate Hike Insufficient, Simkus Says

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