Another interest rate hike by the European Central Bank in July is almost certain, while the outcome of the September meeting is not yet clear and will be determined by economic data in the meantime, ECB Vice President Luis de Guidos said. .

“I think (the interest rate hike) in July is locked in.” For September, I think it’s open,” he told Bloomberg TV on the sidelines of the ECB conference in Sintra, Portugal.

Guidos noted that underlying inflationary pressures may prove more persistent than expected today as the expected strong summer tourist season may push up service prices.

Debate over when the ECB will pause on unprecedented interest rate hikes has intensified among its Governing Council members. Some members have said that a good time to assess the situation would be after the July hike, although others – with an eye on stiff structural inflation – say further tightening is likely to be needed in the autumn.

Christine Lagarde said yesterday that “Our work is not done. Unless there is a significant change in our outlook, we will continue to raise interest rates in July.”

The inflation situation will become clearer this week, with Eurostat releasing June data for the Eurozone on Friday.

The picture looks mixed: While headline inflation looks set to continue to decline, core inflation – which excludes food and energy prices – is likely to have picked up a bit.

Nationally, price increases in Germany may accelerate due to a statistical base effect (city transport ticket prices fell last summer), but in Spain they are likely to fall below the ECB’s 2% target for the first time the last two years or so.

The ECB vice president said the slowdown in the Eurozone economy will likely continue into the second half of 2023.

“I think some of the downside risks are starting to materialize and become much more visible… The data we’re getting on growth is not very good,” he added.