ECB Governing Council member Rehn warned a protracted, attritional Middle East conflict could keep euro-area inflation elevated and said the bank must be prepared. He cited rising energy prices and the near-closure of shipping through the Strait of Hormuz as drivers and warned against an affordability crisis. Rehn’s shift from focusing on growth risks toward inflation concerns signals a widening hawkish contingent on the Governing Council. Last week ECB executive board member Schnabel publicly u

ECB Governing Council member Rehn warned a protracted, attritional Middle East conflict could keep euro-area inflation elevated and said the bank must be prepared. He cited rising energy prices and the near-closure of shipping through the Strait of Hormuz as drivers and warned against an affordability crisis. Rehn’s shift from focusing on growth risks toward inflation concerns signals a widening hawkish contingent on the Governing Council. Last week ECB executive board member Schnabel publicly urged another rate rise in September.