Stubbornly high inflation raises prospect of further ECB rate hikes

The ECB subsequently hiked rates by 25 basis points in July to bring its main rate to 3.75 per cent.

Christine Lagarde, the ECB President, said in a major speech at the Federal Reserve’s Jackson Hole retreat last week, that the battle against inflation hadn’t yet been won. Picture: Thomas Lohnes/Getty Images

An unexpected rise in Irish inflation this month coupled with unwanted developments in Germany and Spain raised the stakes on Wednesday for policymakers trying to get the European Union’s continuing price increases under control.

Prices in Ireland rose by 4.9 per cent in the year to August 2023 compared to a 4.6 per cent jump in the 12 months up to July, according to a flash estimate from the Central Statistics Office (CSO).

The estimate ...