Policymakers at the European Central Bank (ECB) are “very vigilant” about the impact of the Middle East conflict on eurozone inflation. This is primarily because of sharply rising energy prices, German central bank president Joachim Nagel said. He added that it is still too early to say what the conflict will mean for the ECB’s interest‑rate policy.
Nagel did describe the situation as volatile. The war has pushed up oil and gas prices, which could feed into inflation. However, the ultimate effect will depend largely on how long the conflict lasts, he added.
The ECB will hold its next interest‑rate meeting in two weeks, when it will also publish new inflation and growth forecasts for the eurozone. At its February meeting, the bank left rates unchanged for the fifth consecutive time, and markets expect it to hold rates again at the upcoming meeting.
@anp | NEWS BRAINPORT
