ECB's Kazaks sees growing case for more tightening

Kazaks would not be drawn on whether a fresh hike may already come in October but he said the ECB could afford to move "stepwise" and "without rush".

"If we move stepwise, we’ll be well-positioned," he said. "Thanks to past decisions that have proven appropriate, so far we can afford to act without rush or jumpiness."

The Latvian policymaker pointed out that the euro zone's economy was running at capacity, so higher fuel costs might be passed on more easily.

"The output gap is closing, which means that pass-through to prices and wages may strengthen," he said. "That is clearly an upside risk to inflation."

Kazaks argued inflation, which the ECB puts at 3.6% in the last quarter of this year, was still in the "inattention area" for consumers and businesses, but this may change if staples such as fuel and food become even more expensive.

"Those are largely everyday purchase items, which may increase sensitivity to inflation, more so if inflation exceeds wage growth," he said.