ECB executive board member Schnabel said on Monday that with price pressures
spreading beyond energy and the risk of unanchored inf expectations rising, the
central bank can no longer ignore the inf impact of the Iran conflict. Damage to
energy infrastructure and global supply chains have altered price dynamics more
persistently, she said, implying policymakers may need to respond even if the
conflict ends quickly. Schnabel added it is too early to say how many rate hikes
will be required; policymakers will continue to assess incoming data and
developments in the Middle East. She said the current shock differs from past
energy crises because it is increasingly behaving like a global demand shock
while lifting production costs worldwide.
