ECB should hold interest rates despite oil price surge, says Bundesbank boss

{"text":[[{"start":9.1,"text":"The European Central Bank does not need to increase interest rates this month despite the fresh surge in oil prices, Bundesbank president Joachim Nagel said ahead of next week’s policy meeting. "}],[{"start":19.9,"text":"Nagel, one of the ECB governing council’s more hawkish members, stressed that interest rates were “at an appropriate level” at present, implying that he did not see the need for fresh action this month. "}],[{"start":31.2,"text":"“From a monetary policy perspective, it remains advisable to respond with caution while acting decisively if necessary,” the head of Germany’s central bank said in an emailed statement on Wednesday. "}],[{"start":42.65,"text":"The ECB was the first central bank in the G7 to tighten borrowing costs in response to the Middle East energy shock when it increased its key deposit facility last month by a quarter point to 2.25 per cent — its first rate rise in close to three years. It will make its next decision on interest rates on July 23."}],[{"start":63.45,"text":"Markets have fully priced in at least one further quarter-point increase this year, but assign only a roughly 20 per cent probability to a move as early as this month, according to calculations by Reuters based on swap market pricing."}],[{"start":78.05,"text":"Nagel said that last month’s increase was “the right decision even with the benefit of hindsight”. He stressed that the move had been “appropriate across a wide range of scenarios, whether the conflict had eased quickly or continued”."}],[{"start":null,"text":"

"}],[{"start":92.45,"text":"Eurozone inflation fell more than expected to 2.8 per cent in June, but oil prices have risen almost 20 per cent this month to more than $85 a barrel after US President Donald Trump declared the ceasefire with Iran “over” and the two countries traded a series of military strikes."}],[{"start":111.15,"text":"“The renewed escalation of the military conflict in the Middle East and the latest rise in oil prices underscore that the situation remains highly volatile and uncertainty correspondingly elevated,” said Nagel, adding that energy prices would continue to be “a key factor” for the inflation outlook. “Monetary policy will maintain its vigilant stance.”"}],[{"start":132.85,"text":"In an interview with Börsen-Zeitung, Austria’s central bank chief Martin Kocher also suggested that he saw few arguments to increase rates this month. "}],[{"start":140.85,"text":"He stressed that “we currently see no second-round effects” of higher oil prices spilling into the wider economy and that medium-to long-term inflation expectations remained stable. "}],[{"start":150.9,"text":"Kocher added that the ECB would be “ready at any time to deploy monetary policy measures, should that be necessary”."}],[{"start":166.75,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1784114506_7190.mp3"}