General

According to news on August 18, European Central Bank executive board member Isabel Schnabel said that after raising interest rates in July, the inflation outlook in the euro zone has not improved. She said she was in favor of another big rate hike next month, despite heightened recession risks.

The 19-nation European Central Bank surprised investors last month by raising interest rates by 50 basis points amid fears that inflation, now approaching double digits, could become entrenched. However, Schnabel, head of markets operations at the ECB, said the move was not enough to change the inflation outlook, and even a recession itself would not be enough to dampen price pressures.

"Our concerns in July were not assuaged...I don't think the outlook has fundamentally changed," she told the agency.

The report pointed out that raising interest rates in September is considered a sure thing, and policymakers are divided on whether to raise interest rates by 25 basis points or 50 basis points. Schnabel's remarks suggest she is likely to advocate for a larger rate hike.