ECBs Legarde is speaking and says: <\/p>\n
climbing energy costs will push up input prices.Price increases may then be passed to consumer.We should be well-placed to react, when needed<\/p>\n
Current rates: The ECB at their last meeting last week held rates unchanged, with the main refinancing rate at 2.15% and the deposit facility at 2.0%, as policymakers adopted a cautious stance to assess the impact of the Iran\/Middle East war on inflation and growth<\/p>\n
Key driver of uncertainty: The war in the Middle East has made the outlook significantly more uncertain, creating upside risks for inflation and downside risks to economic growth, with a material near-term impact through higher energy prices. <\/p>\n
Market pricing for the next move: Markets are fully pricing in three ECB rate hikes in 2026, with the first potentially arriving as early as June \u2014 a notable shift driven by the energy price shock. Commentary has been more hawkish<\/p>\n
ECB’s own stance: The ECB is following a data-dependent, meeting-by-meeting approach with no pre-commitment to a particular rate path. Its decisions will be based on the inflation outlook, incoming data, underlying inflation dynamics, and the strength of monetary policy transmission. <\/p>\n
Inflation outlook: In the ECB’s March baseline projections, headline inflation is seen averaging 2.6% in 2026, 2.0% in 2027, and 2.1% in 2028 \u2014 revised up compared to December, largely because energy prices will be higher due to the Middle East conflict. <\/p>\n
Growth: Staff expect economic growth to average 0.9% in 2026, 1.3% in 2027, and 1.4% in 2028 \u2014 a downward revision reflecting the global effects of the war on commodity markets, real incomes, and confidence. <\/p>\n
In short, the ECB is in a tricky spot: energy-driven inflation is pushing market expectations toward hikes, while growth risks pull the other way. The June meeting will be closely watched, especially with new staff projections expected.<\/p>\n","protected":false},"excerpt":{"rendered":"ECBs Legarde is speaking and says: climbing energy costs will push up input prices.Price increases may then be…\n","protected":false},"author":2,"featured_media":418264,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-418263","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/418263","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=418263"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/418263\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/418264"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=418263"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=418263"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=418263"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}