According to Martins Kazaks, under what specific condition would the ECB be 'forced' to raise interest rates?

According to Martins Kazaks, the ECB would be 'forced to raise interest rates' if rising oil prices cause inflation expectations to 'deteriorate' — that is, if higher crude prices feed through and undermine medium- to long-term inflation expectations, thereby deanchoring them from the ECB's 2% target.

What does Kazaks say about the current market pricing of a June ECB rate hike and the ECB's internal forecast outlook?

Kazaks declined to confirm or deny whether a 25-basis point rate hike will occur in June, stating only that 'the financial markets are pricing an increase' and 'we’ll see if that situation comes'; he added that, based on the ECB’s scenario analysis and forecasts, 'the situation is a bit worse than it was initially forecast in the base case.'

ECB to Hike If Oil Deanchors Inflation Expectations, Kazaks Says

May 13, 2026

ECB Governing Council member Martins Kazaks indicated that borrowing costs may rise if crude oil prices push inflation expectations higher, casting uncertainty over the June rate hike decision.

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