European Central Bank Governing Council member and Irish central bank chief Gabriel Maohluf has stated that the institution needs to be prepared to increase borrowing costs further if price pressures begin to trend negatively.

Maohluf expressed discomfort over the euro area's inflation rate sitting above 3%, combined with economic growth that has proven "slightly stronger" than market expectations from before the summer. He noted that the upcoming policy decision next week is unlikely to spring any surprises on observers.

The official anticipates that the ECB will also modestly revise upward its growth projection for the euro area in 2026. He attributed this better-than-expected gross domestic product performance as one of the key factors making next week's decision "very clear-cut."

Even if the deposit facility rate reaches 2.5%, Maohluf argued that this level would still not be restrictive to economic activity, adding that the genuinely restrictive range begins above 2.75%. He said inflation expectations remain "well anchored," with no current evidence of second-round effects emerging on the wage front. "The various risks are under control," he concluded.