Knott: There is an even chance that the ECB will raise rates or pause in September

　　Governing Council member Klaas Kernot, president of the Dutch Central Bank (NED), said markets may be underestimating the likelihood of a rate hike by the European Central Bank (ECB) next week, as the central bank's inflation forecast at this meeting should be about the same as in June.

　　In an interview with Bloomberg, he said: "In this case, a rate hike or a pause would be an even decision." I continue to believe that achieving a 2 percent inflation target by the end of 2025 is the minimum we must achieve. Obviously, I would be uncomfortable with any development that pushed the deadline further back. I wouldn't mind if it moved up a little bit."

　　He added: "We have entered the refined phase of this tightening cycle. Further rate increases are still possible but not inevitable."

　　On the recent poor performance of major economic indicators, he said: "I would caution against being too pessimistic. We're talking about weakness. We are not talking about an outright recession."

　　On inflation conditions and the outlook, he said: "Underlying price pressures appear to have levelled off and will decline markedly in the coming months." A marked slowdown in wage growth is essential to achieve the inflation target of 2 per cent by the end of 2025. If I look at the results of the current wage negotiations, it is far from our goal. Inflation expectations remain well anchored, although some are at the upper edge of our comfortable range."