ECB's Schnabel: Higher Interest Rates Needed Amid Resilient Euro-Zone Economy

European Central Bank (ECB) Executive Board member Isabel Schnabel has emphasized that interest rates must continue to rise due to the resilient euro-zone economy and high energy costs. Speaking on August 26, 2026, Schnabel noted that consumer-price growth is likely to exceed 2% for an extended period.

The German official warned that policymakers would be 'behind the curve' if they only acted when inflationary pressures fed into wages, implying a need for preemptive action. She attributed this risk to the economic resilience and high energy costs in the region.

Schnabel's comments indicate that the ECB is paying close attention to the potential upside risks to inflation, particularly given the prolonged conflict in the Middle East which has had significant economic implications.