Nagel Says ECB Must Stay Flexible as Inflation Risks Persist

The European Central Bank must remain ready to respond to different inflation scenarios as geopolitical developments in the Middle East cloud the price outlook, Governing Council member Joachim Nagel said.

Nagel, who also heads Germany’s Bundesbank, stressed the need for flexibility as the ECB navigates uncertainty over the path of inflation.

His remarks highlighted the continuing importance of developments in the Middle East to the bank’s assessment of price risks.

The message was one of preparedness: the ECB should keep its options open rather than assume inflation will follow a single course.