Central Banks and Airlines Split Over How Much Oil Risk Justifies Higher Rates

European Central Bank policymaker Boris Vujcic pushed back against market bets that rising oil prices would force the ECB into additional rate hikes, according to an exclusive report. His comments contrast with Barclays, which is sticking with its forecast for a Bank of England rate hike in November and separately warned that an escalation in the Middle East conflict could force even more tightening than currently priced. The disagreement matters because airlines are already feeling the direct cost of higher oil: jet fuel costs have risen enough to create clear winners and losers among carriers based on how much of their fuel exposure is hedged. Airlines with less hedging are absorbing costs that hedged competitors are avoided, a gap that widens the longer oil stays elevated. What remains unresolved is whether oil prices stay high enough, long enough, to move from a fuel-cost problem for airlines into a broader inflation problem serious enough to force the rate hikes Barclays is forecasting and Vujcic is playing down.