ECB Council Member Kocher Considers Interest Rate Hike in September Possible

Vienna, July 24, 2026

The Austrian ECB Council member Martin Kocher has not ruled out a possible further interest rate hike by the European Central Bank in September, linking it to the achievement of the medium-term inflation target.

The Austrian ECB Council member Martin Kocher has not ruled out a possible further interest rate hike by the European Central Bank in September, linking it to the achievement of the medium-term inflation target. As expected, the ECB Council decided on Thursday to keep the deposit rate at 2.25 percent, where it has stood since June.

Kocher, who is also Governor of the Oesterreichische Nationalbank (OeNB), wrote in a contribution published on the OeNB website: "Sollte es notwendig sein, die Zinsen zu erhöhen, um unser mittelfristiges Ziel zu erreichen, so wird das passieren." In addition, he emphasized to the media: "Sollte es nicht notwendig sein, die Zinsen zu erhöhen, dann wird es auch keine Erhöhung im September geben."

Data Dependence as Guiding Principle

With this formulation, Kocher made clear that the ECB Council's decision in September will be data-dependent. The monetary policymakers want to closely observe inflation developments in the coming weeks, as they themselves have stated, before deciding on the next interest rate move. The interest rate hike in June, which Kocher defended given the inflation outlook that had deteriorated at the time, had given the monetary policymakers the necessary room for a careful analysis of further developments, according to the contribution.

The upcoming meeting in September will then include, among other things, inflation data from July and August, an updated forecast through 2028, and many other data points. The ECB's monetary policy course thus depends directly on actual price developments in the eurozone. Should inflation rise more strongly than expected, an interest rate hike would, in Kocher's words, be the likely consequence.

Room for Careful Analysis

Kocher also pointed out that the ECB Council had justified its decision in June as a necessary precautionary measure. The inflation outlook that had deteriorated at the time had been decisive in raising the deposit rate. The fact that the rate has now remained unchanged at 2.25 percent since June does not mean, from the perspective of the Austrian central bank chief, that the monetary policy tightening cycle is already complete.

The eurozone has repeatedly drawn attention to itself in recent months with fluctuating inflation data. Energy prices, food costs, and wage settlements are observed by the ECB as central factors for medium-term price developments. Which of these components will prove particularly persistent is to be shown in the upcoming data that the ECB Council wants to evaluate in September.

Inflation Factors Under Observation

With regard to monetary policy strategy, Kocher emphasized that the ECB continues to align its inflation outlook with a symmetric target of two percent. Deviations upward or downward over an extended period could make monetary policy responses necessary. The ECB had already reaffirmed this principle in earlier statements, and Kocher picked it up again in his current contribution.

In Vienna, Kocher's contribution is also being read as a signal to markets to prepare for increased volatility in September. Investors and banks are observing the ECB's monetary policy communication particularly closely because any hint of a possible interest rate move has effects on the interest rate curve in the euro area. Kocher's wording of explicitly leaving the September decision open is therefore likely to be noted attentively.

For the domestic economy in Austria, the question of the further interest rate path has immediate consequences. Loans for businesses and private households, mortgage financing, and savings products are oriented to the ECB's key interest rates. Should the central bank indeed follow up in September, this would further tighten financing conditions in the eurozone and weigh on the economic cycle.

Effects on Economy and Markets

The ECB had carried out its monetary policy tightening cycle step by step in recent years, after inflation had risen significantly as a result of the Ukraine war and the energy crisis. Price dynamics in the eurozone have since weakened, but in individual months they are still above the target of two percent. For this reason, the central bank is maintaining a wait-and-see stance and signaling readiness for further steps if this appears necessary.

Kocher sits on the ECB Council as Austria's representative. In recent months, he has repeatedly emphasized that monetary policy normalization is not yet complete. His current statements fit into this picture: on the one hand, emphasizing data dependence, while on the other signaling readiness to act if inflation proves more stubborn than hoped.

The next regular interest rate meeting of the ECB Council is scheduled to take place in September. Observers expect that the central bank will publish both an updated inflation forecast and a reassessment of growth prospects at its meeting. Kocher's contribution on the OeNB website is read in this context as a preview of the monetary policy debate in the Council.

Outlook for the September Meeting

Kocher's statement was picked up in international media on Thursday and partly interpreted as confirmation of a more restrictive monetary policy. Other observers pointed out that the ECB traditionally keeps many doors open with its statements and will only decide on a final direction once the new data is available.

Regardless of interpretation, the following applies: The ECB has expressly reserved the option of a further interest rate hike for itself, without, however, committing to it. This stance corresponds to the central bank's strategy of tying monetary policy decisions strictly to the data situation.

The coming weeks until the September meeting will therefore be characterized by close observation of inflation, wage, and economic data in the eurozone. Should this data show inflationary pressure to be sustained, the ECB will, in Kocher's words, act – otherwise it will leave rates unchanged. This conditional formula is the core of the Austrian central bank chief's most recent communication.