By Marta Vilar – FRANKFURT (Econostream) – The European Central Bank could still raise interest rates in September even if second-round effects have not yet emerged, should the overall inflation outlook warrant it, according to ECB Governing Council member Olaf Sleijpen.

In an interview with Econostream on 23 July 2026 (transcript here), Sleijpen, who heads De Nederlandsche Bank, said that September's monetary policy decision would depend on multiple factors.

“They [second-round effects] are important, but we will assess the entire inflation outlook,” he said. “No single variable or set of variables determines the decision.”

Asked specifically whether the ECB could still hike in September if second-round effects had not yet emerged, Sleijpen replied: “I would not exclude that possibility.”

The ECB was not yet seeing second-round effects from the recent energy shock, including those that would be captured by the central bank’s wage tracker, he said. Still, he noted that wage data were inherently lagging.

“Labor markets are cooling somewhat but remain relatively tight,” he said.” Trade unions have also recently experienced the high inflation of 2022 and 2023, which may affect wage demands.”

A rise in productivity had helped contain unit labor costs, he observed.

Asked whether the ECB was ready to act in September, Sleijpen declined to speculate, citing heightened uncertainty and the rapid change in circumstances in recent weeks.

Referring to President Christine Lagarde's assessment that risks were once again closer to the June baseline, he said: "I agree with that."

Sleijpen declined to state whether he had been among the governors who favored raising rates in July, confirming only that the final decision had been unanimous.

On market pricing, Sleijpen said markets understood the ECB's reaction function and what triggered its decisions.

As to which incoming data would matter most before September, he pointed to developments in the Middle East.

“How the conflict evolves and how it affects the economy and prices will be important,” he said. “Much of the uncertainty comes from that.”

The ECB would monitor the overall picture for inflation, including direct, indirect and second-round effects, of which he said there was no evidence yet.

He refused to describe the June move as a pre-emptive hike, characterizing the decision as “appropriate given the inflation outlook.”

On this month’s inflation data, Sleijpen said the weaker-than-expected June reading could create base effects, though the outcome would also depend on more recent developments.

He described growth as “relatively resilient,” while arguing that weak structural growth remained beyond the reach of monetary policy.

“From a cyclical perspective, however, the economy has held up reasonably well,” he added.

Current rates were still within the neutral range, he said, noting that uncertainty surrounding estimates of the neutral rate meant they were not a decisive input into policy decisions.

“The key question is whether a rate increase is necessary to maintain price stability,” he said.

On the possibility of raising the ECB's minimum reserve requirement, Sleijpen echoed Lagarde, saying the Governing Council had not discussed the issue at its July meeting but would do so in the future.