European Central Bank (ECB) policymakers continue to line up behind another big interest rate hike as inflation in the eurozone's biggest economy hit double digits, blasting past expectations and heralding another record reading for the bloc as a whole.
This is despite comments from the ECB's Chief Economist Philip Lane that such commentary was "not helpful" given the fact that the next meeting is still a month away.
The ECB has raised rates by a combined 125 basis points over its last two meetings and promised further increases as sky-high food and energy prices filter into the rest of the economy and intensify underlying price pressures.
Strengthening the case for another 75 basis point increase, German inflation jumped to 10.9% this month, far beyond expectations for a reading of 10%. It was the first time Europe's biggest economy reached double digits since the euro was introduced more than 20 years ago.
It suggests the figure for the wider 19-country eurozone, due on Friday, is also likely to exceed the predicted 9.6%.
"My choice would be 75 (basis points)," ECB policymaker Gediminas Simkus told Bloomberg TV on the sidelines of a conference in Vilnius "But 50 is the minimum."
Colleagues including Slovakia's Peter Kazimir, Austria's Robert Holzmann and Finland's Olli Rehn have all put 75 basis points on the table in recent days, even though the ECB's next meeting on October 27 is still nearly a month away.
However, speaking to broadcaster CNBC, Mr Lane, a former Governor of the Central Bank of Ireland, said the only thing that was clear at this stage was what direction the rates would go.
"We know we are going to do several hikes, but we are going to do them over several meetings. Trying to do too much in one go is exactly the situation where you might get absorption issues in the market," he said.
"There's also a lot of uncertainty. Here we are at the end of September. We do not need to take a strong view about what 2023 looks like. Let's get these several hikes done and then we can see what 2023 looks like.
It comes as euro-area economic confidence dropped to the lowest since 2020 this month as record inflation and the prospect of the first winter in a generation without Russian gas cast a shadow over the region.
A measure of sentiment compiled by the European Commission fell to 93.7 in September. That’s less than the median forecast in a Bloomberg survey of economists and the lowest since November 2020. The outcome marks the seventh consecutive monthly decline.
All gauges feeding into the index from services to industry showed deterioration, with consumer sentiment falling the most. Uncertainty among households is at an all-time high.