Climate Change Now a Key Economic Risk, but Unlikely to Shift ECB Stance

Dow Jones08-07

1008 GMT - Climate change is becoming a key economic risk, Berenberg analysts say in a note. Still, while drought in Germany has created supply disruptions, the European Central Bank is likely to look through this for now, they say. The Rhine's low water levels mean ships can only pass through carrying very little cargo, if at all, creating supply bottlenecks, the analysts say. The situation is driving up costs and could hit growth by up to 0.2 percentage points in the third quarter, they say. However, only a fraction of German freight passes along the Rhine, while companies have already begun adapting. The Middle East conflict overshadows these temporary supply bottlenecks and the ECB is unlikely to attach much importance to them, they say.

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