By Bart Meijer AMSTERDAM, March 24 (Reuters) - Soaring oil and gas prices are likely to become entrenched in the wider economy more quickly than during the 2022 energy crisis, Dutch Central Bank
ECB’s Sleijpen: Energy Prices Expected to Ripple Through Economy Quicker Than 2022
ECB Insights on Energy Prices and Economic Impact
By Bart Meijer
Rising Oil and Gas Prices: Faster Economic Transmission
AMSTERDAM, March 24 (Reuters) - Soaring oil and gas prices are likely to become entrenched in the wider economy more quickly than during the 2022 energy crisis, Dutch Central Bank Governor Olaf Sleijpen said on Tuesday.
ECB’s April Meeting: Monitoring Second-Round Effects
The Dutch representative on the ECB's Governing Council said he and colleagues will have more information at their April meeting on the second-round effects, which occur if companies hike their prices to offset higher input costs and employees demand higher wages.
ECB’s Response to Market Developments
"We can't control oil and gas prices, but we can act if we see second-round effects. I think we will have more information on that front in April," he said in reference to the ECB's next rate-setting meeting on April 30.
Comparing 2022 Crisis to Current Situation
Sleijpen said in 2022, when the start of the Ukraine war drove up energy costs, the economy had been in a period of low inflation so it took people longer to get used to the rise in prices and realise the impact on their spending power.
"Everybody is more alert now, so the shock can more easily ripple through the economy," he said in comments to reporters in Amsterdam.
Key Indicators and Data Limitations
Sleijpen said inflation expectations and producer prices would be key indicators for the ECB during the April meeting, but said data would still be incomplete.
"It will be limited, but we will have to work with it," he said.
"The complete picture will not have emerged between last week and the end of April."
(Reporting by Bart Meijer; editing by Barbara Lewis)
