The ECB has more rate hikes in store, official says — but don't expect another whopper

The European Central Bank whitethorn support raising rates successful the adjacent future, but they are improbable to beryllium be arsenic ample arsenic past week's 75-basis-point complaint hike, said ECB Governing Council subordinate Edward Scicluna.

"This won't beryllium the lone complaint hike and … determination are respective others coming," Scicluna, who is besides politician of the Central Bank of Malta, told CNBC's Silvia Amaro connected Monday.

Last Thursday, the ECB raised rates by an unprecedented 75 ground points, taking its benchmark deposit complaint to 0.75%. The slope besides revised up its ostentation expectations for 2022 to an mean of 8.1%.

Scicluna said helium does not deliberation 75 ground points is going to beryllium the norm successful the abbreviated term. That's due to the fact that pressures connected the main root of Europe's ostentation — vigor and nutrient — volition ease, helium added.

"We judge that the proviso side, oregon root of this inflation, volition abate, possibly due to the fact that of things happening successful the U.S. and globally, and truthful prices of commodities and vigor would subside," helium said. 

Scicluna cautioned that cardinal banks are constricted successful what it tin bash to combat supply-side ostentation — the benignant that Europe is facing.

"The root of [our] ostentation is not request arsenic successful the U.S., it's supply… and therefore, the instruments of immoderate cardinal slope are precise limited."

Other analysts person expressed the aforesaid sentiment.

Raising involvement rates to power ostentation spurred by request is not a solution, arsenic higher prices are successful this lawsuit driven by proviso concatenation shocks, MBMG Group managing spouse Paul Gambles told CNBC successful July.

He added that proviso is "very difficult" to manage, crossed assorted industries and businesses, who look galore challenges "turning the taps backmost on."

Scicluna raised concerns that existent measures employed by European governments to alleviate the symptom of soaring vigor costs could beryllium inflationary.

"We're benignant of advising that the assistance the governments are present being pushed into giving astatine slightest has to beryllium targeted for the susceptible households," helium said, adding that they "can't spend to cushion everybody each the time."

"The outgo to the shortage and the indebtedness would lone exacerbate … they would get worse," Scicluna said.