By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Ülo Kaasik said Friday that markets expected another two to three ECB rate hikes this year, but that the timing of the next move was extremely difficult to predict.

Kaasik, who heads Eesti Pank, told Estonia's Äripäev radio that much would depend on how the war in the Middle East developed after the ECB’s 25bp rate hike on Thursday.

“A great deal depends on how the Middle East conflict develops,” he said. “Markets expect another two to three interest-rate increases this year.”

Kaasik was similarly reserved on the timing of the ECB’s next move, saying it was “extremely difficult” to say when borrowing costs would next be raised.

“There’s a lot of uncertainty,” he said.

The reason the Governing Council raised rates on Thursday, after leaving them unchanged at the previous meeting, was that there had still been hope earlier that the conflict might be resolved, Kaasik said.

“The reason we raised them this time and didn’t raise interest rates last time, for example, was that there has always been a hope that maybe this conflict would be resolved,” he said.

According to Äripäev, Kaasik said there had been hope until the last moment that the geopolitical situation might resolve.