European Central Bank committee member Kazaks stated that if oil prices lead to inflation expectations becoming unanchored, the central bank will raise interest rates.

Martins Kazaks, a member of the European Central Bank's Governing Council, said that if rising oil prices lead to increased inflation expectations, the ECB will have to raise borrowing costs. The Latvian central bank governor stated in an interview with the public broadcaster LTV on Thursday: "As oil prices rise, we see that this is gradually starting to push up inflation. If inflation expectations begin to deteriorate, then the ECB will be forced to raise interest rates." Market and economic analysts generally expect the ECB to raise rates by 25 basis points at their June meeting. While some officials have hinted that they have seen enough data to support this move, others have indicated that the economic outlook needs to deteriorate further before they take action. "Financial markets are currently pricing in a rate hike - I cannot confirm or deny," Kazaks said. "We will wait and see if this situation materializes. But if we refer to scenario analysis and our forecasts, then the current situation is slightly worse than the initial forecasts under the baseline scenario."