ECB Ready to Respond to Energy Price Shock

The European Central Bank (ECB) is in a good position to respond to surging energy prices, according to Bundesbank President Joachim Nagel. Speaking on Friday, Nagel said that the ECB should take incoming data into account before deciding whether to raise interest rates in September.

The ECB left interest rates unchanged on Thursday, but offered strong clues that a hike is likely due to oil and natural gas price increases. Oil prices are back around $100 a barrel, while natural gas prices are surging.

Nagel emphasized the importance of monitoring further developments closely, as the situation in the Middle East remains 'highly fragile'. He added that intense uncertainty still surrounds the energy market.