Inflation outlook in the euro area has not improved due to increase in interest rate euro during the meeting European Central Bank in July, board member Isabelle Schnabel said. And this shows that she is in favor of a larger interest rate hike next month, despite the growing risk of a recession in the eurozone. It is worth noting that the European Central Bank surprised investors in July by opting to continue raising 50 basis points as it worries that inflation escalation will take root in the European economy. The serious point, however, is that this step, as it turned out, was not enough to change the forecast for inflation. Ms. Schnabel emphasized this in an interview with Reuters news agency, adding that even a recession will not be able to control inflationary pressures.

European Central Bank officials appear to be divided on whether it will be in the 25 bps or 50 bps range.

As for the next meeting of the European Central Bank in September, a further increase in the cost of borrowing is considered certain. Its leaders were divided on the scale of the increase and whether it would be within 25 basis points or 50 basis points. After Isabelle Schnabel’s statements, they show that she is in favor of a wider movement. For his part, another member of the Board of Directors of the European Central Bank, in an interview with the Latvian television channel TV3, Mārtiņš Kazaks, stressed that the rise in interest rates will continue. The President of the Bank of Latvia, in particular, noted that “at the moment we see that inflation in general is at an unacceptably high level, while in Latvia it has exceeded 20%, and if we do not curb it, the consequences will be even more painful “. The battle must be fought with the tools of fiscal policy and structural change. “Already in December last year, monetary policy tightened,” he explained. “Initially, we cut support programs, and in previous months we raised interest rates significantly, and we will continue to do so with our main goal of preventing inflation from becoming deeply entrenched in the European economy.” Finally, it is reported that in July the inflation index in the Eurozone jumped to 8.9%.