By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Olaf Sleijpen said Tuesday that the ECB was ready to respond if the Middle East energy shock pushed inflation away from its 2% target.

Sleijpen, who heads De Nederlandsche Bank, spoke at a press conference on the Dutch central bank’s Spring 2026 Financial Stability Report. The ECB’s June decision would depend heavily on whether higher energy prices were feeding into broader inflation, he said.

“What we will mainly look at is the extent to which the rise in energy prices, which we have already observed and which has already increased headline inflation, is feeding through into other price indicators,” he said.

Sleijpen did not commit himself on June, saying the upcoming data would determine his assessment. Markets did not appear to expect the energy shock to normalize quickly, he said.

At the same time, he pointed to countervailing forces that could restrain inflation, including tighter financing conditions and a weaker economic backdrop.

“Financial conditions have become more restrictive, interest rates have risen ... banks are becoming stricter when it comes to lending,” he said.

Growth expectations and confidence indicators were weakening, Sleijpen said.

He also cautioned against treating the current shock as a replay of the 2022 inflation surge, when the post-pandemic reopening had produced much stronger demand pressure.

The present episode was a “classic negative supply shock,” he said.

That distinction matters for policy because higher energy prices can raise inflation while also weighing on activity.

The Dutch central bank chief did not reject the possibility of a June hike, but framed the issue around incoming evidence of pass-through, the persistence of the energy shock and the extent to which weaker demand was already limiting broader price pressure.