Bundesbank President Joachim Nagel, a member of the European Central Bank's Governing Council, said on the 22nd that oil prices are becoming an increasingly important indicator as the ECB makes its monetary policy decisions. Speaking at an event in London, Nagel noted that while oil prices are "never the only indicator" for policy decisions, "their importance has certainly grown over the past four years," adding that "it is clear that the ECB Governing Council must keep a close eye on oil prices and take them into account when making policy decisions." The backdrop is that inflation has been running above target due to soaring energy prices. He also said he is not particularly concerned about labor market developments.
ECB's Nagel says oil prices are increasingly important for policy decisions amid above-target energy-driven inflation, a signal that keeps ECB rate policy in focus.
