As conflicts in the Middle East intensify pressure on energy markets, Schnabel, a member of the ECB Governing Council, said the latest rise in prices was highly concerning. Schnabel made the remarks at the 2nd European Competitiveness Symposium in Berlin.
Schnabel said the increase in energy costs was not limited to oil, drawing attention also to refined products such as diesel and natural gas prices, which had reached high levels. Saying it was not yet clear whether the ECB's rate hike on September 10 would be sufficient, Schnabel said future decisions would be based on new data.
Eurozone inflation rises
At its September meeting, the ECB raised its policy rate to 2.50% and revised most of its inflation forecasts upward. Following the decision, market expectations of further rate hikes strengthened.
Annual inflation in the eurozone reached 3.3% in August amid a rapid rise in energy costs. This was the highest inflation rate recorded in three years.
Gas prices reach four-year high
Natural gas prices in Europe rose to their highest level since 2023 and began trading at a four-year peak. Oil prices also moved back above the $100 threshold amid the conflicts in the Middle East.
European countries' delay in filling gas storage facilities during the summer, amid expectations that the conflict with Iran would end and prices would fall, was seen as a key factor behind the increase in prices.
Storage levels remaining well below the average of previous years led to an acceleration of supply operations. Markets are pricing in a more than 60% probability that the ECB will raise interest rates again at its meeting at the end of October.
