FRANKFURT, July 24 (Reuters) – The European Central Bank is in a good position to respond to surging energy prices and should take incoming data on board before deciding whether to raise interest rates in September, Bundesbank President Joachim Nagel said on Friday.
The ECB left rates unchanged on Thursday but offered strong clues that a hike in September is likely since oil prices are back around $100 a barrel and natural gas prices are also surging.
“The rate hike in June already put us in a good position from which we can monitor further developments closely,” Nagel said in a statement.
“We are seeing in the Middle East that the situation remains highly fragile,” he added. “We are still facing intense uncertainty.”
While ECB President Christine Lagarde said that a rate hike was debated on Thursday, the decision to stay on hold was unanimous, partly because the energy price surge is not generating second-round inflation impacts.
Nagel said the ECB should not pre-commit to any rate move and should instead analyse the large volume of data coming before its next meeting on September 10.
(Reporting by Balazs Koranyi; Editing by Kirsten Donovan)
