THINK Ahead: The big June gamble in Stock News 04/05/2026 European central bankers are threatening rate hikes in June. But if they’re hoping for clarity on inflation over the next six weeks, they’re likely to be disappointed, argues James Smith. Come for the niche economics memes, stay for our preview of the week ahead… The big June gamble Don’t ask me why, but this week’s European Central Bank meeting got me thinking about a meme from The Simpsons. The one with the bus driver who silently taps a sign reading “Don’t talk to the driver” every time a passenger strikes up conversation. Christine Lagarde could have saved herself a lot of effort this week by doing much the same. A gentle tap on a banner saying “We’re hiking in June unless energy prices collapse” would probably have covered most of the questions. She didn’t put it quite that bluntly, of course. But she did say the Governing Council had a lengthy discussion about hiking. She said the ECB is moving away from its previous baseline, towards a world implicitly associated with higher interest rates. And, most tellingly, she said “directionally” that she knew where rates were heading. If that still wasn’t explicit enough, an inevitable “ECB sources” quote soon followed, suggesting a June hike is highly likely. What stood out more to me, though, was Lagarde’s suggestion that the ECB would have “a lot more information” on how the crisis is feeding through to inflation by the June meeting, just six weeks away. That feels optimistic. Yes, headline inflation is going higher. It’s already at 3% and our team expects it to push towards 4%, broadly consistent with the ECB’s “adverse” March scenario, and the one Lagarde now appears to be emphasising. And yes, consumer inflation expectations have jumped, too. Data this week showed households expect inflation of 3% three years out, up from 2.5%, matching the highs of 2022. Something similar has happened in the UK. That’s already two of the three warning lights Carsten Brzeski identified in his ECB preview. But neither tells us much about persistence, nor about the strength of second‑round effects. And that will take time. Food inflation – one of the clearest channels for energy prices to feed through – is unlikely to peak before next winter. It may take even longer for inflation pressures to show up in prices less directly affected by energy. Think services that are repriced annually. Or wages, which in Europe are governed by slow, multi‑year bargaining processes. True, the ECB and other central banks will see more survey data by June. So far, those hint at only partial pass-through from higher input costs to output prices. But most businesses, like the rest of us, still don’t really know how this crisis will affect them – let alone where the crisis itself is headed. It’s not at all clear that we will be much the wiser by June. There’s a growing view in energy markets that the current stalemate could drag on. Dated Brent – physical oil ready for delivery – is trading around $122/bbl, some $10 higher than a week ago. Then again, geopolitical experts point to a planned meeting between Presidents Trump and Xi in mid-May, and whether the US will want it to be overshadowed by events in and around the Gulf. That raises at least the possibility of a deal that allows some tankers to move again. Our own updated oil forecasts are based loosely on a scenario where disruption to oil flows reduces from 70% today to 35% through May. If that entails a fragile