ECB's Pereira says risks have risen considerably in past few months
The Governing Council member says conditions have worsened since the ECB's last rate move in September
Published
Alvaro Santos Pereira, a member of the European Central Bank's Governing Council and governor of the Bank of Portugal, said risks have risen considerably over the past few months, according to Bloomberg.
The remark extends a run of warnings from Pereira over the past year. In November 2025 he flagged a possible sharp correction in financial markets and crypto assets as a top short-term threat to financial stability, Bloomberg reported. By January 2026 he was pointing to signs of overvaluation in markets more broadly, telling Econostream Media that a steep correction could have a significant global impact with spillovers to Europe and Portugal, though he saw no reason then to adjust rates while inflation stayed close to 2%. By May, his tone had hardened: he told Reuters, as reported by Investing.com, that the ECB needed to act sooner rather than later to stop price pressures becoming entrenched.
The ECB raised its deposit rate to 2.5% in September 2026, with President Christine Lagarde citing upside risks to inflation and downside risks to growth, according to CNBC. Traders expect four further quarter-point increases by the end of 2027.
Pereira's latest comment adds to a hawkish tone from ECB leadership on inflation and economic headwinds, in line with officials signalling openness to further hikes through the end of the year. It reinforces rather than shifts the existing picture: the ECB remains data-dependent, and conditionally ready to tighten further.