ECB Policy Hinges on Energy Prices: Bundesbank Chief

Bundesbank President Joachim Nagel stated that energy prices will be a key factor in determining whether the European Central Bank (ECB) needs to raise interest rates further. In an interview with CNBC, he said that 'it depends very much on how energy prices evolve and how the overall price situation develops over the next month.'

The ECB recently raised its key rate by 25 basis points to 2.5%, bringing it to the upper end of the neutral range. Nagel did not rule out the possibility that rates may become 'moderately restrictive' in the future, but emphasized that the current policy path depends on energy prices.

Nagel noted that international oil prices remain elevated, with Brent crude and WTI both crossing the $100-per-barrel threshold. Europe's natural gas market is also under pressure, with Dutch TTF natural gas futures touching their highest level since 2022.