ECB closely monitors consumer prices

Governing Council member Pablo Hernandez de Cos said that the European Central Bank will continue to keep "extremely vigilant" on consumer price expectations to ensure they do not exceed its medium-term target.

“We will also have to watch out for a possible decline in medium-term and long-term inflation expectations above 2%,” de Cos declared on Monday. “We will be monitoring these figures very closely in the coming months.”

De Cos, who is also the head of the Bank of Spain, agrees that more rate hikes are required to fight record high inflation. In his opinion, when making a decision on the pace of monetary tightening, the upcoming economic and inflation data will play a major role.

Forecasts for another record inflation rate in the euro area this week are growing up expectations for a sequential 75 basis point rise at the next ECB meeting.