ECB's hawkish name sends message of limited additional increase

One of the hawkish European Central Bank governors, Latvian central bank governor Martin Kazaks, said any further rate hikes by the ECB would be more limited. According to Martins Kazaks, a member of the European Central Bank’s Governing Council, any additional rate hikes by the ECB would not be large. Kazaks said the ECB would need to see its new three-month projections and August inflation figures before deciding on its monetary policy path as inflation slows in the euro zone. “The big hike in interest rates is over. If we look at the coming months, if there will be an increase in interest rates, it will be very small indeed,” Kazaks told Latvia’s TV3 channel on Thursday. Analysts polled by Bloomberg predict a final quarter-point increase in the deposit rate to 4%, even as inflation pressures ease and the region’s economic prospects deteriorate. The euro zone has so far avoided recession, while its largest member, Germany, entered recession after a winter downturn.