ECB Faces June Rate-Hike Case as Inflation Tops 2% on Iran War Energy Surge
Updated
Updated · Bloomberg · May 22
ECB Faces June Rate-Hike Case as Inflation Tops 2% on Iran War Energy Surge
1 articles · Updated · Bloomberg · May 22
Madis Muller said the ECB has a solid case to raise interest rates in June, arguing the Iran war has driven an energy surge that strengthens the need for a response.
Inflation has already moved above the ECB’s 2% target, he said, even as the euro-zone economy weakens, leaving policymakers caught between price pressures and slowing growth.
Muller, Estonia’s central-bank chief and an outgoing Governing Council member, made the comments Friday in Ljubljana in an interview with Bloomberg Adria.
The remarks underscore how the Iran conflict is complicating the ECB’s next decision by reviving energy-driven inflation risks just as the growth outlook deteriorates.
As the Iran conflict chokes global energy, is Europe headed for an unavoidable stagflation crisis?
Will the ECB risk a recession to defend its inflation target against the ongoing energy crisis?