June ECB minutes say the bank can no longer ignore an energy shock, noting expected energy price rises could push medium-term inflation above its 2% target. The Governing Council unanimously raised the key rate to 2.25% last month, the first major central bank to hike in response to energy-price pressures linked to the Iran war. The minutes warn that the longer energy prices stay elevated, the greater the chance indirect and second-round effects will lift broader inflation and entrench the shock

June ECB minutes say the bank can no longer ignore an energy shock, noting expected energy price rises could push medium-term inflation above its 2% target. The Governing Council unanimously raised the key rate to 2.25% last month, the first major central bank to hike in response to energy-price pressures linked to the Iran war. The minutes warn that the longer energy prices stay elevated, the greater the chance indirect and second-round effects will lift broader inflation and entrench the shock in core inflation and medium- to long-term inflation expectations.