ECB cautions markets on further rate hikes amid energy‑driven inflation risk

The European Central Bank’s Governing Council met on 11 June and, after a unanimous 25‑basis‑point increase that took the deposit rate to 3.75 %, agreed to send a clear message that markets should not assume any automatic further tightening. The minutes show the Council stressed a “clear possibility” that rising energy prices – spurred by the Middle‑East conflict – could spill over into broader price‑setting, reviving second‑round inflation pressures.

In the same discussion, the ECB highlighted the resilience of the Spanish economy, noting that high‑frequency indicators point to almost no short‑term impact on activity. The International Monetary Fund confirmed its growth forecasts for Spain of 2.1 % in 2026 and 1.8 % in 2027, well above euro‑area averages, crediting stronger renewable‑energy shares and supportive policies.

The central bank also warned that higher financing costs – with Spanish corporate loan rates having risen by roughly 300 basis points since 2022 – combined with potential energy‑price spikes could weigh on sectors such as food distribution and construction, slowing the recovery of investment.