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ECB may raise rates beyond 2.50% if energy prices keep rising

  • ECB policymaker Joachim Nagel said rates may need to rise further if energy prices keep increasing.
  • 2.50% was the ECB’s key rate after Thursday’s second rate increase this year.
  • ECB policymakers expect further tightening, with October identified as an early possibility by two sources.

The European Central Bank (ECB), the euro-zone central bank, may need to raise interest rates beyond 2.50% if a war-fuelled increase in energy prices persists, ECB policymaker Joachim Nagel said on Friday. The ECB lifted borrowing costs for the second time this year on Thursday, while policymakers expect additional tightening in the coming months and could act as early as October, two sources told Reuters. Nagel said the key rate had reached the upper end of a neutral range, where policy neither stimulates nor slows economic activity, but further increases may be needed to move into mildly restrictive territory. He said the path would depend on energy prices and the broader inflation picture over the next month.

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ECB may raise rates beyond 2.50% if energy prices keep rising - CoinPost Terminal