ECB Prepares for Potential Rate Hikes Amid Rising Energy Prices

The European Central Bank (ECB) is in a good position to respond to any deterioration in inflation outlook following its interest rate hike in June, according to Bundesbank President Joachim Nagel.

Nagel made the statement as oil prices surged back near $100 a barrel and natural gas prices continue to rise, indicating that the ECB may need to raise interest rates again. This has reinforced expectations that the ECB will pull the trigger after the summer break, even if policymakers were more measured in their public commentary.

Austrian central bank chief Martin Kocher also echoed similar views, stating that a hike may become necessary but it's unclear if it would be in September. He noted that 'if the inflation outlook becomes worse... then there is a necessity to act.'