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FRANKFURT, Sept 11 (Reuters) – The European Central Bank might need to raise interest rates further and bring them to a level that mildly curbs the economy if a war-fuelled rise in energy prices continues, ECB policymaker Joachim Nagel said on Friday.
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The ECB raised borrowing costs on Thursday for the second time this year and policymakers expect further policy tightening in the months ahead, with a move possible as early as October, two sources told Reuters.
Nagel said the ECB had brought its key rate, now at 2.50%, to the upper end of a neutral range that neither stimulates nor slows down the economy. But it may still need to go further.
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“I will not exclude that we have to go into the mild restrictive territory, but as I said, 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,” he told CNBC in an interview.
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(Reporting by Francesco Canepa; Editing by Sharon Singleton and Toby Chopra)
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