ECB policymaker Kocher signals vigilance on energy-driven inflation but sees no evidence of second-round effects yet.
The European Central Bank kept its three key interest rates unchanged, pausing after an extended tightening cycle to assess incoming data. Policymakers cited elevated uncertainty around energy prices as a key risk to inflation dynamics, though they have not yet observed wage or price spillovers from recent oil market volatility.
ECB Governing Council member Kocher emphasized the bank’s readiness to act if the inflation outlook deteriorates, describing the current stance as “well positioned to be vigilant” over the coming weeks. While growth forecasts remain subdued, Kocher stopped short of predicting a recession, noting weak but not collapsing economic activity.
The ECB’s data-dependent approach remains focused on preventing energy shocks from embedding into underlying inflation. Officials are monitoring whether higher oil prices translate into broader price pressures, though no hard evidence of second-round effects has emerged so far.