ECB might need mildly restrictive policy, Nagel says

FRANKFURT, Sept 11 (Reuters) – The European Central Bank might need to raise interest rates further and bring them to a level that mildly curbs the economy if a war-fuelled rise in energy prices continues, ECB policymaker Joachim Nagel said on Friday.

The ECB raised borrowing costs on Thursday for the second time this year and policymakers expect further policy tightening in the months ahead, with a move possible as early as October, two sources told Reuters.

Nagel said the ECB had brought its key rate, now at 2.50%, to the upper end of a neutral range that neither stimulates nor slows down the economy. But it may still need to go further.

“I will not exclude that we have to go into the mild restrictive territory, but as I said, it’s very much dependent on how the energy prices evolve, how the price picture is evolving over the course of maybe the next month,” he told CNBC in an interview.