What did ECB Governing Council member Joachim Nagel say about the potential need for monetary policy action due to the Iran-related energy shock?

Joachim Nagel stated that the energy supply shock stemming from the Middle East conflict is 'more persistent,' causing the ECB to move away from its baseline scenario and raising the possibility that 'we have to do something'—indicating a potential shift in monetary policy, including possible interest-rate adjustments at the June meeting, depending on incoming data and growing risks of broad-based inflation.

How does Nagel assess the likelihood of inflation spreading across the economy, and what does he say the ECB will do in response?

Nagel said 'the probability is rising that we will see more inflation everywhere,' emphasizing that this development is 'something we have to take into consideration, and we will do this at our next meeting,' confirming the ECB’s intention to evaluate evolving inflation risks—including second-round effects from higher energy costs—during its upcoming June monetary-policy decision.

Nagel Says ECB May Have to Do Something as Iran Shock Persists

May 19, 2026

ECB official Joachim Nagel warns that persistent energy supply shocks from the Middle East conflict may force rate hikes as oil and gas costs drive inflation beyond targets.

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