ECB Bundesbank Chief Nagel Says December Rate Hike Is Almost Unavoidable

Bundesbank President Joachim Nagel said on November 3 that another ECB interest-rate increase in December is very likely to be necessary, describing inflationary pressures as higher than expected in September and warning that conditions are approaching the ECB's adverse scenario. He added that the ECB can and must act to prevent an energy price spike from triggering broad-based inflation across the eurozone.

The ECB held its deposit rate steady at 2.50% the previous week, but Nagel made clear the pause is not a pivot, saying a further hike is almost unavoidable unless the inflation outlook improves significantly. Inflation is expected to exceed 4% in the coming months, more than double the ECB's 2% target. Bulgarian central bank chief Dimitar Radev separately warned that the inflation outlook has deteriorated since September, reinforcing the hawkish tone from multiple policymakers heading into the December meeting.