ECB may need further rate hikes if oil stays near $100, Kocher warns
ECB policymaker Martin Kocher says interest rates may need to rise further if oil prices remain around $100 a barrel through year-end.
The European Central Bank could be compelled to raise interest rates again if crude oil prices stay close to $100 a barrel until the end of the year, Austrian central bank governor Martin Kocher has said.
Kocher, who is among the ECB's senior policymakers, cautioned that the danger of inflation running higher has grown compared with a few months ago. In comments published in an interview, he said the balance of risks has shifted upward.
Oil prices climbed sharply over the past week as the conflict in the Middle East continued and shipping faced fresh disruptions, feeding concerns about energy costs across the euro area.
Kocher indicated that if oil and natural gas prices drift toward a more adverse scenario, the central bank would have to factor those movements into its monetary policy decisions. Such a shift, he added, would intensify inflationary pressures further.
The remarks came after the ECB raised interest rates on Thursday, its second increase this year, as it seeks to contain an inflation surge driven largely by energy costs.
Policymakers are weighing how persistent energy-led price pressures may prove, with the trajectory of oil and gas markets emerging as a key variable in the rate path ahead.