German central bank chief expects ECB rate rise in December

German central bank president Joachim Nagel says the European Central Bank is likely to raise interest rates in December, arguing that a rise is unavoidable if current inflation forecasts hold. His comments came after the ECB left its main rate unchanged last week, following a quarter-point increase in September.

Nagel, who is also a member of the ECB’s Governing Council, said higher energy costs linked to the conflict in the Middle East risk feeding through into other prices. Euro-area inflation reached 3.8% in September, its highest level in three years, according to the report. Eurostat was due to publish a preliminary estimate for October on Wednesday.

The ECB had held its rate at 2.5% to assess the effects of previous increases. Nagel’s forecast is not a decision by the Governing Council: the bank has yet to announce whether it will raise rates in December.