Oil prices gaining weight in ECB rate decisions, says Bundesbank chief Nagel
Bundesbank President Joachim Nagel says oil prices have become a more relevant indicator for the ECB as high energy costs push inflation off target.
Oil prices are playing a growing role in how the European Central Bank weighs interest-rate decisions, Bundesbank President Joachim Nagel said on Tuesday, noting that elevated energy costs have kept inflation away from the central bank's target this year.
Speaking at a financial event in London, Nagel said crude prices are not the sole factor guiding policymakers, but their significance has increased markedly over recent years.
"It's definitely not the only indicator (we look at) but it's become a more relevant indicator over the last four years, this is for sure," he said.
Nagel added that the ECB's Governing Council cannot ignore oil-market developments when setting policy. "It is obvious that we in governing council have to look at it and we have to take it into account when we take our decisions," he said.
His remarks underscore the challenge facing the ECB as it seeks to steer inflation back to target while energy costs remain a persistent source of price pressure across the euro area.