Finance
ECB's Nagel Says April Rate Hike 'an Option'
Published by Global Banking & Finance Review®
Posted on March 26, 2026
2 min readLast updated: March 26, 2026
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ECB Governing Council member Joachim Nagel said on March 26 that a rate hike at the April 29–30 meeting is a real option if the Middle East conflict fuels inflation. Markets now anticipate two to three hikes by year‑end amid renewed energy price pressure.
ECB's Nagel Considers April Rate Hike Option Amid Inflation Risks
ECB Policy Outlook and Inflation Concerns
Potential for April Rate Hike
FRANKFURT, March 26 (Reuters) - The European Central Bank has "an option" to raise interest rates at its next meeting if war in the Middle East raises the spectre of an inflation surge in the euro zone, ECB policymaker Joachim Nagel told Reuters.
The ECB has put rate hikes on the table after the conflict in Iran caused a spike in energy prices, with traders now speculating on whether the first move may come in April or at the following meeting in June.
Decision Factors for April Meeting
Nagel, who heads Germany's Bundesbank, said he and his colleagues will have enough information, both about the war and its impact on the economy, to decide on a potential rate hike at their April 29-30 gathering.
"It is certainly an option, but just one option," he said of an April rate hike during an interview.
"I think we’ll have enough data by April to determine whether we need to take action or whether we can wait and see. But we shouldn’t shy away from it now just because we think it’s still too early," he added.
Inflation Drivers and ECB Response
Impact of Energy Prices and Supply Disruptions
ECB President Christine Lagarde said on Wednesday the central bank for the 21 nations that share the euro was prepared to act at any meeting to keep inflation at its 2% target.
The surge in the price of oil and gas is a big blow for the energy-importing euro area. In addition, the closure of the Strait of Hormuz has choked the supply of some chemicals such as fertilisers.
Wage Growth and Broader Price Pressures
Nagel said he and his colleagues would look for signs of price hikes beyond the energy sector and of rises in wages, which would suggest that higher inflation was taking root in the euro zone.
"This is certainly a situation in which every passing day contributes to an increase in inflationary risks, particularly with regard to what interests us most from a monetary policy perspective: how medium-term inflation expectations will evolve," he said.
Market Expectations
Traders price in two or three hikes to the ECB's policy rate by the end of the year, which would leave it at 2.50% or 2.75%.
(Writing by Francesco CanepaEditing by Gareth Jones)
Key Takeaways
- •Joachim Nagel emphasized that although an April hike is just one possible course, the ECB will have sufficient data on the economic and inflation impact of the Middle East war by then to make a decision.
- •ECB President Christine Lagarde reaffirmed that the bank stands ready to act at any meeting to achieve its 2 % inflation target, underscoring preparedness amid volatile energy markets.
- •Market expectations for ECB hikes have surged: traders now fully price in two to three rate increases by year‑end, lifting the anticipated policy rate to between 2.50 % and 2.75 %.
Frequently Asked Questions about ECB's Nagel says April rate hike 'an option'
1Why is the ECB considering an April rate hike?
The ECB might raise rates in April if the Middle East conflict causes inflation to surge in the eurozone due to rising energy prices.
2What factors will influence the ECB's rate decision?
Key factors include the impact of energy prices, wage increases, and inflation risks resulting from the Middle East conflict.
3What did ECB's Joachim Nagel say about the April meeting?
Nagel said an April rate hike is an option, but policymakers will decide based on available data about inflation and the war's impact.
4How many rate hikes are traders expecting from the ECB this year?
Traders expect two or three ECB rate hikes by year-end, potentially raising the policy rate to 2.50% or 2.75%.
5What impact has the Middle East conflict had on the eurozone?
The conflict has caused energy prices to spike and supply disruptions for some chemicals, adding inflationary pressure to the eurozone.