ECB May Need Further Rate Hikes Due to Persistent Energy Price Pressures

The European Central Bank (ECB) may need to raise interest rates further if energy prices persist at high levels, according to ECB policymaker Joachim Nagel.

Nagel stated that the current policy rate of 2.50% is at the upper end of a neutral range, which means it neither stimulates nor significantly slows economic activity.

However, he indicated that persistent energy price pressures could prompt the central bank to go beyond this range and move into mildly restrictive territory.

The ECB's policy decisions will depend heavily on the trajectory of energy prices and broader inflation developments over the coming weeks.