ECB officials are preparing for further tightening monetary policy, suggesting they may act again as early as October to deal with increasing inflationary pressure. With prices rapidly approaching 4% in the Eurozone's 21, and economic performance is better than expected, policymakers are putting forward reasons that interest rates need to continue to rise. Since the war in Iran drove energy costs to soar, the ECB has raised interest rates twice, and is currently the most hawkish central bank among the G7 economies. The data released on Friday highlighted this challenge: in August, residents' inflation expectations increased over all periods tracked by the ECB. Although wage requirements and other aspects have yet to respond much to the rise in oil and gas prices, officials are advocating preventive measures to prevent inflation from taking root.

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