One energy shock, four answers: ECB and Fed hike, BoE waits, Riksbank lines up

Serguey Asael Shinder01 October 2026, 07:222 min read

The same oil shock is producing visibly different policy across the major central banks, and this week's speeches and minutes explain why. The disagreement is not about whether energy prices are high. It is about how far they will spread and how tight policy already is.

ECB: act on the forecast. Isabel Schnabel argued that a supply shock changes the speed of tightening, not whether to tighten, if it pushes projected inflation above target. The ECB has raised its deposit rate from 2% to 2.5% since June. Her case rests on starting conditions, with services inflation still above 3% and core inflation projected at 2.6% in 2027, and on the view that waiting for second-round effects means acting too late. Source: https://www.ecb.europa.eu//press/key/date/2026/html/ecb.sp260930_1~7c6c120482.en.html

Fed: the hike is done. Governor Lisa Cook said she voted with the rest of the FOMC for September's 25 basis point increase, the first since 2023, because inflation has been above target for more than five years. For the Fed the deciding factor is the length of the overshoot rather than the oil shock alone. Source: https://www.federalreserve.gov/newsevents/speech/cook20260930a.htm

Bank of England: the bar for more is high. MPC member Alan Taylor said evidence of second-round effects is scant, the labour market is looser than in 2022, and Bank Rate and market rates are already well above his neutral estimate of 2.75% to 3%. He sees no compelling case for increases unless energy prices stay high and spread. Source: https://www.bankofengland.co.uk/speech/2026/september/searching-for-signposts-speech-by-alan-taylor

Riksbank: the timing question. Sweden held at 1.75% on 23 September, but the minutes show a board debating when, not whether, to raise. Governor Erik Thedéen called November reasonable. Swedish inflation is low, but growth was 3.3% in the second quarter and the krona has weakened. Source: https://www.riksbank.se/en-gb/press-and-published/notices-and-press-releases/press-releases/2026/minutes-of-the-monetary-policy-meeting-on-23-september-2026

What divides them. Read together, the four positions line up with initial conditions more than with the shock. Where underlying inflation was still elevated (the euro area) or above target for years (the US), the banks moved. Where policy was already restrictive and slack had opened (the UK), the argument is to wait. Where inflation is low but growth is strong (Sweden), the hike is being prepared for demand reasons. If oil falls back, the banks that waited will look right; if it stays above $100, the ones that moved will.