By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Olli Rehn on Tuesday declined to say whether he would support another rate hike in July, saying the ECB should not “jump the gun” and that inflation expectations remained anchored.

Rehn, who heads the Bank of Finland, told Bloomberg Television on the margins of the ECB Forum on Central Banking in Sintra, Portugal that the ECB should continue to take decisions “meeting by meeting” on the basis of incoming data and comprehensive analysis.

“The current situation is such that we have indeed seen short-term inflation increasing”, he said. “But at the same time, while there are some indirect effects, I don’t see any major second-round effects materializing. And inflation expectations are anchored.”

“So let’s not jump the gun and let’s see what the data will tell us next month”, he said.

Asked directly whether he would hike in July, Rehn said that “the current outlook underlines the importance of taking decisions in monetary policy meeting by meeting.”

“We are not committed to any predetermined rate path”, he said. “Instead, we take decisions at each meeting based on fresh data and comprehensive analysis.”

Rehn also resisted giving any guidance on whether another hike would be likely before year-end.

“As I said, I’m not doing forward guidance, not in public or even in my own head”, he said.

Rehn said the recent energy shock had been stagflationary in nature, though not comparable in scale to the 1970s.

“This energy shock has been stagflationary”, he said. “Not like in the 1970s — that was very deep stagflation — but its nature is of a very similar kind.”

In the short term, inflation had been higher and growth “somewhat more subdued”, he said.

Price pressures would be reduced rather than increased if the ceasefire with Iran held and oil prices remained roughly where they were, Rehn said. However, he also said there would be “plenty of geopolitical uncertainty” ahead.

“My own personal view is that we’d better be prepared for a prolonged conflict”, he said. “We of course hope that the ceasefire will hold.”

Rehn said markets had done “lots of work” for the ECB ahead of the June rate increase and had reacted pre-emptively to the move.

He said monetary policy worked with a lag and that the ECB would have a price analysis on the table at its July and September meetings.

“We take decisions when the time is ripe”, he said.