ECB’s Makhlouf backs December hike of at least 50 basis points

The European Central Bank should raise borrowing costs by at least a half-point this month to curb surging consumer prices, according to Governing Council member Gabriel Makhlouf.

“To continue on our path to bring inflation back to our 2% target, I see a 50 basis-point increase in interest rates as the minimum needed at our December meeting,” Makhlouf said Monday in a speech in Dublin.

“We have to be open to policy rates moving into restrictive territory for a period,” the Irish central-bank chief said. “It is premature to be talking about the end-point for policy rates amid the prevailing levels of uncertainty.”

After hikes of 75 basis points at their last two meetings, ECB officials appear to be open to a smaller increase at their final gathering of the year next week. With euro-zone inflation having slowed for the first time in 1 1/2 years in November, policy makers including France’s Francois Villeroy de Galhau favor a 50 basis-point step. – BLOOMBERG