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 outlook for prices, Governing Council member Joachim Nagel said.

Nagel, who also heads Germany’s central bank, the Bundesbank, stressed the need for flexibility as the ECB assesses how inflation could evolve.

His remarks highlighted the uncertainty surrounding the price outlook, with developments in the Middle East remaining a source of risk for policymakers.

The emphasis was on preparedness for a range of possible outcomes, rather than assuming inflation will follow a single path. Nagel’s message underscored the importance of keeping the ECB able to respond as conditions change.