Published by Global Banking & Finance Review®
Posted on March 6, 2026
4 min readLast updated: April 1, 2026
Add as preferred source on GoogleCrude oil prices have surged more than 20% this week amid escalating U.S.–Israel–Iran conflict, yet ECB policymakers emphasize data‑dependence and caution, seeing little immediate need for rate hikes.
FRANKFURT, March 11 (Reuters) - Oil prices have jumped nearly 50% since the start of the year amid the war in Iran, prompting markets to bet the European Central Bank will raise rates to counter energy-driven inflation.
Financial investors are now pricing around rate hikes of around 30 to 35 basis points this year, with the first hike fully priced in by September.
Here are recent comments from key policymakers:
ECB President Christine Lagarde, March 10:
"I can assure you ... that we will do everything necessary to keep inflation under control and to ensure that the French, the Europeans, do not experience inflationary increases like those we saw in 2022 and 2023."
Bundesbank President Joachim Nagel, March 11:
"We must be very vigilant.
"If it becomes apparent that the current energy price increases will translate into broad consumer price inflation in the medium term, the governing council of the ECB will act decisively in a timely manner.
"At this point in time, however, it is still too early to reliably assess the medium- to long-term consequences, given the volatile situation."
ECB Vice President Luis de Guindos, March 11:
"We need to keep a cool head.
"An amplification of the shock effect of an energy shock can occur and may lead to an even more intense impact on economic activity.
"The conflict has a negative impact from the point of view of risks to sales performance."
French central bank Governor Francois Villeroy de Galhau, March 11:
"The meaning of this crisis is unfortunately becoming clearer with each passing day. Economically, it means a little more inflation and a little less growth.
"I do not believe, as things stand today, that interest rates need to be raised right now... But we will not allow inflation to take hold."
ECB board member Isabel Schnabel, March 6:
"With inflation projected to be at our target over the medium term and inflation expectations anchored, monetary policy remains in a good place.
"The recent spike in energy prices following the tensions in Iran makes the inflation path more uncertain.
"What matters for monetary policy is the medium-term outlook – that is, whether underlying price dynamics and wage developments are consistent with the target over the policy-relevant horizon.
"Judged on this basis, the lessons from the pandemic suggest that policymakers must tread carefully."
Dutch central bank Governor Olaf Sleijpen, March 6:
"While I would not use the word nirvana or Goldilocks anymore, I haven't dramatically changed my view on where we are, which is still a good place.
"I'm still in the good place ... but everything depends on how this conflict will develop.
"We are truly data-dependent. So, it depends on how things will develop and how we are going to assess those developments going forward."
Spanish central bank Governor Jose Luis Escriva, March 6:
"With the information I have, I think it's very unlikely that we will touch rates at the next meeting.
"We can already take it for granted that there will be effects (from the war).
"Our inflation target of 2% is a medium-term horizon. Transitory movements should not necessarily lead us to make decisions.
"Instead, we must monitor the situation and assess to what extent this is having more persistent effects over time."
Latvian central bank Governor Martins Kazaks, March 3:
"We should sit tight.
"I don't see that we need to rush to do something with policy rates."
(Reporting by Balazs Koranyi; Editing by Nivedita Bhattacharjee and Bernadette Baum)
ECB officials believe there is no preset pace for policy changes and prefer to monitor incoming data before acting on energy-driven inflation.
Despite a 27% surge in oil prices, policymakers generally see these effects as potentially short-lived and advocate caution.
According to Spanish central bank Governor Jose Luis Escriva, it is very unlikely that rates will be changed at the next meeting.
The ECB maintains a medium-term inflation target of 2% and is monitoring whether recent energy price surges have lasting effects.
Unlike the post-quantitative easing phase of 2021/2022, the ECB now faces energy price shocks and is taking a more data-dependent approach.
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