European Central Bank Governing Council member Dimitar Radev said policymakers should not rush into further action before determining whether previous rate increases are effectively curbing inflation.
Speaking at an MNI Connect video conference on Thursday, the Bulgarian central bank governor stressed that this month's rate hike does not mean the ECB has "embarked on a pre-set policy path."
"Patience remains important, but vigilance should be somewhat more important," Radev said. "This is not a call for automatic tightening, but rather it means we should give previous policy decisions time to take effect, while also being prepared to respond if evidence shows inflation is more persistent."
These remarks suggest that, compared with some policymakers who have proposed acting again as early as October 29, Radev may prefer to wait until the ECB's December meeting to decide whether to raise rates further. At that time, the ECB will release its quarterly economic projections, providing officials with more information for their decisions.
Radev said the ECB currently cannot fully determine whether the surge in energy costs triggered by the Middle East war will remain confined to the energy sector or spread to other parts of the economy. However, he noted that "broad second-round effects" have not yet emerged.
"Inflation remains above our target, and the energy shock may last longer than initially expected," Radev said. "At the same time, the eurozone economy has shown greater resilience than many had anticipated. The current task is to judge whether this shock will remain largely confined to energy or become more persistent and broadly spread."
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