ECB’s Kazimir sounds alarm on surging gas and power prices as inflation risks mount

Peter Kazimir, Governor of the National Bank of Slovakia and a voting member of the ECB Governing Council, has shifted his inflation radar away from oil and toward something potentially more painful for European households: natural gas and electricity. In a blog post published September 14, Kazimir laid out why the ECB’s mood on prices has darkened. Natural gas is trading at four-year highs, EU storage levels are well below historical norms, and the knock-on effects for heating bills, power costs, and food prices haven’t fully materialized yet. For a central bank that just hiked rates for the second time this year, the timing is uncomfortable. The gas problem, explained Europe’s natural gas predicament isn’t new, but the latest chapter has a familiar villain: geopolitics. Kazimir pointed to ongoing tensions related to the Iran conflict as a driver of volatile market conditions that delayed summer storage-filling campaigns across the continent. The result is a storage deficit heading into the colder months, precisely when demand spikes. “My attention is now focused less on oil and fuel prices, but increasingly on gas and electricity prices.” The ripple effects run deep. Natural gas ...