By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Mārtiņš Kazāks said on Thursday that if inflation expectations deteriorate the ECB would be “forced” to hike interest rates.

In an interview with Latvian TV LTV, Kazāks, who heads the Latvijas Banka, said that “[o]il prices are higher, we see that it’s gradually starting to push inflation up, and if inflation expectations start to deteriorate, then the ECB will be forced to raise interest rates.”

Financial markets were expecting a rate hike, he said, adding that he could not confirm or deny that possibility.

“We’ll see if that situation comes,” he said. “But if we look at the scenario analysis and at our forecasts then the situation is a bit worse than it was initially forecast in the base case.”

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