ECB might need mildly restrictive policy, Nagel says

ECB policymaker Joachim Nagel said on Friday that the European Central Bank may still need to raise interest rates further to a “mildly restrictive” level if energy prices driven by war continue to surge. The ECB raised borrowing costs on Thursday for a second time this year, and additional tightening is expected in the months ahead, with a possible move as early as October, according to two Reuters sources. Nagel noted the ECB’s key rate is now 2.50%, placed at the upper end of a neutral range that neither boosts nor cools growth. Still, he said more may be needed depending on the next month’s energy and inflation outlook.