The European Central Bank’s next moves will hinge largely on where energy prices go from here, according to Bundesbank President Joachim Nagel, who told CNBC that policymakers are watching the commodity complex closely before deciding whether borrowing costs need to rise further.
“It’s very much dependent on how the energy prices evolve, how the price picture is evolving over the course of maybe the next month,” Nagel said in an interview with CNBC’s Annette Weisbach on Friday. His comments came a day after the ECB lifted its key interest rate by a quarter percentage point to 2.5%.
Markets got no immediate relief from the commodity backdrop. Brent crude and U.S. West Texas Intermediate both traded above $100 a barrel on Friday morning, while Dutch TTF futures — a benchmark for European natural gas — touched their highest level since 2022.
Rates at ‘upper end of neutral’
Nagel’s read on the current stance is that rates sit at the upper end of neutral territory, the zone in which policy neither stimulates nor restrains economic growth. Still, he declined to rule out going further.
“What we see is that energy prices went up last week, now we are close to $110 [per barrel crude oil],” he said, adding that the decision announced Thursday reflected the central bank’s latest forecast.
Asked whether the current cycle might deliver one or two more hikes, Nagel kept his options open. “It’s too early to speculate on this,” he said.
The month leading up to the meeting brought considerable swings in energy markets, and Nagel suggested the picture remains unsettled. “It is not clear what are the energy prices doing over the next weeks and months, so I think it is dependent on the energy price development and I will do my assessment when we are coming together the next time,” he said, pointing to the next scheduled gathering of policymakers.
No repeat of 2022, Nagel says
Even with gas futures climbing, Nagel said he is not worried about relatively low levels of European gas storage ahead of winter. The situation, in his view, does not resemble the energy crisis of 2022–2023, largely because buyers now have more options for sourcing liquefied natural gas.
That distinction matters for the inflation outlook. The earlier crisis drove a surge in European power and heating costs that fed directly into consumer prices and forced the ECB into a rapid sequence of rate increases. This time, the central bank is weighing elevated crude and gas prices against an economy that has already absorbed a long stretch of tighter policy.
For now, the message from Frankfurt — and from Germany’s central bank — is that the data, and above all the energy tape, will set the pace. Nagel’s framing leaves the door open to another move should price pressures persist, but stops well short of committing to one.
Source: www.cnbc.com — https://www.cnbc.com/2026/09/11/ecb-nagel-energy-prices-further-interest-rate-hikes.html
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