Central Banks
ECB Hike Potentially Closer Than Thought on Iran War, Kazimir Says
Destroyed buildings following airstrikes in central Tehran on March 4.
Source: AFP/Getty Images
The Iran war and its impact on inflation risk forcing the European Central Bank to raise interest rates sooner than anticipated, according to Governing Council member Peter Kazimir.
While the ECB is still in a “good place” and there’s no need to act at next week’s meeting, Kazimir worries that memories of the region’s 2022 inflation shock have lowered the threshold for businesses to raise prices and consumers to demand higher pay. Upside risks clearly dominate the outlook, he said.