Nagel Signals Possible ECB Restrictive Shift Amid Inflation Concerns

European Central Bank (ECB) member and Bundesbank President Joachim Nagel stated that restrictive monetary policy cannot be ruled out, despite current 'neutral' interest rates. In a speech at a financial event in London, Nagel acknowledged the impact of high energy prices on inflation, saying it has driven inflation off its 2026 target.

Nagel expressed confidence in the labour market, stating he is not concerned about its developments. However, he also noted that ECB rates are still in neutral territory and cannot exclude the possibility of turning mildly restrictive if necessary.