By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Martin Kocher said Friday that data arriving over the coming weeks would determine whether the ECB raises interest rates again in September or holds them steady.

“We are in a position that allows us to see whether the incoming data of the next couple of weeks — PMI data, inflation data, and other data — that this data points to the direction of a hike or a hold in September,” the Oesterreichische Nationalbank governor told Bloomberg Television.

The Governing Council had considered all options on Thursday and viewed recent oil market developments as concerning, Kocher said. But the ECB’s June rate increase had put it in a position to monitor the situation and remain vigilant while awaiting further data.

The Council therefore decided to hold rates on Thursday, he said, adding that ECB President Christine Lagarde’s description of the available options accurately reflected the discussion.

Kocher said there was no firm evidence that the Middle East conflict had produced second-round inflation effects.

“We don’t see any hard evidence of second-round effects,” he said. “We see direct effects, of course. We see indirect effects that were also mentioned by President Lagarde. But we don’t see more than anecdotal second-round effects.”

Second-round effects would be associated mainly with wage developments, which the ECB would monitor closely over the coming weeks and months, Kocher said.

“This will clearly be crucial,” he said.

The ECB was also watching natural gas and food prices, including food-price developments potentially related to El Niño, other weather events and climate change, Kocher said.

Policymakers needed to assess how such developments might affect inflation expectations and inflation six months to a year ahead, the horizon relevant for monetary policy decisions, he said.