The ECB Governing Council member said a near-term increase remains necessary even if the Iran war ends quickly, warning that elevated energy costs could keep inflation under pressure and weigh on activity.
European Central Bank Governing Council member Joachim Nagel said this week’s interest-rate increase remains necessary even if the Iran war ends quickly, and warned that elevated energy prices could persist in that scenario. His comments suggest the ECB still sees enough inflation risk to justify tighter monetary policy, even as high energy costs may also weigh on economic activity and broader markets.