Analysis: The European Central Bank may consider raising interest rates, influenced by the rise in oil prices.

Point72 economist Soeren Radde said that following the surge in oil prices due to military actions in the Middle East, the European Central Bank may lean towards raising interest rates. He stated in a report that consumers, having experienced the energy shock of 2022, may be more sensitive to inflation expectations or a further acceleration in prices. Combined with a more flexible fiscal background, this could prompt the European Central Bank to tighten rather than loosen its stance. Radde warned that in practice, the European Central Bank will be cautious not to mistake a very persistent energy price shock as something it can "ignore" or even tolerate as a temporary shock.