ECB Director Schnabel is concerned about energy prices and leaves interest rates open

Berlin. ECB Director Isabel Schnabel has expressed concern about the increased energy prices and at the same time left the further monetary policy course open.

It remains to be seen whether last week's interest rate increase was done, she said on Monday at an event organized by the Federal Ministry of Economics in Berlin. “The next decisions will be made based on incoming data,” said Schnabel.

Recent price increases in the energy sector are “quite worrying,” she further emphasized. This applies not only to oil, but also to refined products such as diesel and also to gas, which has reached a very high price level.

The Slovak ECB Governing Council member Peter Kazimir also recently expressed concern about the development of natural gas prices. The European Central Bank (ECB) raised its key interest rate to 2.50 percent on Thursday and revised many of its inflation forecasts upwards. This fueled market speculation about further interest rate hikes.

Natural gas prices are at a four-year high. The reason for this is that European countries hesitated to fill their gas storage facilities in the summer in the hope that the Iran conflict would be resolved and prices would fall. With levels now well below historical averages, gas is being rushed into storage, driving up prices.

The ECB's next interest rate decision is due at the end of October. On the financial markets, the probability of an interest rate increase at this point is estimated at over 60 percent, while a rate hike by the end of the year is already largely priced in.