Bonds & Rates
Home›Bonds & Rates›Central Banks›ECB warns higher energy prices are lifting euro area i…
ECB warns higher energy prices are lifting euro area inflation risks
The ECB said renewed US-Iran hostilities pushed up energy futures curves, while European gas prices rose to their highest level since early 2023.
European Central Bank Executive Board member Isabel Schnabel told the ECB that euro area financial markets since the 22-23 July 2026 monetary policy meeting have been driven largely by energy price developments, with attention shifting to a global rise in long-term yields.
Schnabel said persistently high energy prices, reinforced by concerns about higher food price inflation, have raised market expectations for a higher inflation and policy-rate outlook, noting that energy prices and futures curves moved up after renewed US-Iran hostilities.
Within Europe, she said the market focus has shifted from oil to refined products and gas, with gas oil, a refined diesel-type product, rising significantly on concerns about limited refining capacity.
She added that European gas prices have reached the highest level recorded since early 2023, and that low gas storage levels could further pressure prices, with additional upward risks from a European heatwave and concerns about a strong El Niño event.