European Central Bank Governing Council member Olaf Sleijpen stated that the ECB is prepared to act if conflict in Iran drives inflation away from the 2% target. "Persistently high oil prices will eventually pass through to other goods prices and influence wage formation, which could amplify inflationary effects," he said during a speech in Amsterdam on Thursday. "In such a scenario, the ECB would naturally intervene to ensure inflation remains around 2% over the medium term." He also noted that the longer the conflict lasts, the more prolonged the disruption to oil and gas production and supply would be, inevitably leading to greater impacts on economic growth and inflation.
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