EZB-Kurs: Nagel: Zinserhöhung im Dezember wahrscheinlich

The European Central Bank (ECB) is on track for a December interest rate hike, according to Bundesbank President Joachim Nagel, a member of the ECB's governing council. Speaking from Berlin, Nagel stated that "as of today, hardly any path passes by an interest rate hike if the inflation outlook does not improve significantly." The ECB governing council convenes on December 17th for their next monetary policy meeting.

In response to the rising inflation rate, primarily due to higher energy prices, the euro-zone guardians have already raised interest rates twice this year. At their meeting last week, they left the key rate for banks and savers at 2.5 percent. Higher interest rates make credit more expensive, which can slow demand and dampen inflation.

However, higher rates also weigh on those seeking to invest, potentially slowing economic growth. Inflation remains on the rise. The war in Iran is driving up energy prices and heating up inflation. In September, consumer prices in the euro-area were 3.8 percent above the level of the previous year, the highest since three years.

The latest ECB estimate suggests that people in the euro-area must expect higher inflation to continue until at least 2027. "From our perspective, it is now very likely that inflation pressure will be higher than expected in September," Nagel said. "Moreover, repeated price surges in energy can push up prices for other goods and services more, and they can increasingly break through into wage demands.

That would push prices up again." The ECB aims for a 2.0 percent inflation rate over the medium term, which its central bank views as its most important goal: to maintain a stable euro and preserve people's purchasing power.