ECB Weighs Further Rate Hikes Amid War-Driven Energy Price Surge

The European Central Bank (ECB) may raise interest rates further to curb inflationary pressures caused by rising energy prices, according to two policymakers.

Bundesbank President Joachim Nagel and Estonian central bank governor Ülo Kaasik expressed concerns about the impact of war-fuelled price increases on the euro zone economy.

The ECB raised its key rate from 2.25% to 2.50%, bringing it to the upper end of its estimated neutral range, which neither stimulates nor slows down the economy.

Nagel stated that 'I will not exclude that we have to go into the mild restrictive territory' if energy prices continue to rise, while Kaasik noted that recent developments in energy markets indicate a possibility of larger and longer-lasting price increases for gas and fuels.