The surge in natural gas prices raises concerns, prompting heightened expectations of ECB rate hikes

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智通财经2026/09/14 22:46

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European Central Bank policymakers said on Monday that eurozone inflation may ultimately be higher than previously forecasted, and recent energy price trends are worrying, especially the sharp rise in natural gas costs. The European Central Bank raised part of its inflation forecast when it hiked rates last week, but current oil and gas prices are far above the “baseline” levels in those forecasts, suggesting price pressures may persist for longer.
ECB Executive Board member Schnabel said in Berlin that recent energy price trends are “quite concerning”; not only oil, but also refined oil products such as diesel are rising, and natural gas prices, which are particularly important for Europe, have also reached very high levels. According to ECB forecasts, under the baseline scenario, December natural gas futures are at 60.1 euros per megawatt hour, and under the adverse scenario at 77 euros, while the current market price has already exceeded 83 euros. Brent crude closed on Monday at $106.15 per barrel, also much higher than the adverse scenario assumption.
Slovak central bank governor Kazimir said inflation risks are clearly tilted to the upside, and his focus has shifted from oil and fuel prices to natural gas and electricity prices; food inflation is also expected to accelerate. Latvia’s central bank governor Kazaks said the case for further tightening is growing, and interest rates may need to move into restrictive territory, with no insurmountable barrier to rising above 2.50%.
However, other policymakers are more cautious, believing that assessments should continue on a meeting-by-meeting basis, and further rate hike signals should only be given after more evidence is available. European countries relying on natural gas for heating failed to fill storage facilities as summer dragged on, hoping the Iran conflict would end and prices would fall. With inventories far below historic normal levels, these countries are now scrambling to fill storage, pushing gas prices to a four-year high, which could increase heating and electricity costs for households and businesses, and fuel broader inflation.
Food price increases have so far remained unexpectedly low, but a combination of factors including drought in Europe, the El Niño weather phenomenon, and sharp rises in diesel and fertilizer prices are expected to push food prices higher in the coming months. Diesel and fertilizers are both key inputs for agricultural production.
The ECB’s next meeting will be held on October 29. Financial markets now see the likelihood of a rate hike at about 60%, and have fully priced in a rate hike expectation by the end of the year.

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The surge in natural gas prices raises concerns, prompting heightened expectations of ECB rate hikes

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