ECB's Holzmann argues for 125bp of ECB hikes by September

The head of Austria's central bank argued in favour of a faster pace of monetary policy tightening should the outlook for inflation not improve.

In an interview with the Kronen Zeitung, Robert Holzmann, who also sits on the European Central Bank's governing council, said the monetary authority should hike interest rates by 50 basis points at its 21 July policy meeting and possibly by 75bp when it next met on 8 September.

"When the situation does not improve, s 0.75 percentage point hike may eventually become necessary," he reportedly said.

"The time has now come for clear rate steps, otherwise inflation will solidify.

Inflation's return to the ECB's 2.0% target would depend on the central bank's actions, he added, and might not occur until 2024.

Current guidance from the ECB is for a 25bp hike in July followed by a 25-50bp move in September depending on how inflation evolves.