Thursday’s ECB accounts said geopolitical developments in the Middle East,
Ukraine and Russia leave oil and gas prices exposed to elevated upside risk.
Although oil remains well below recent peaks and the futures curve has softened,
prices are still well above pre-war levels across the projection horizon,
indicating persistent upside pressure. The ECB said the recent drop in oil has
not eased the market-implied medium-term inflation path and that inflation
expectations remain anchored. It reiterated it will continue to fulfill its
price-stability mandate and take timely action to achieve a 2% medium-term
inflation target.
