By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Joachim Nagel said on Wednesday that the ECB would react “decisively” if the recent energy price surge translated into consumer inflation.
In emailed comments to Reuters, Nagel, who heads the Deutsche Bundesbank, said that US President Donald Trump’s statement about the Iran war being “very complete” offered “cause for hope,” adding that the spike in energy prices had deteriorated the economic outlook and increased inflation risks.
“We must be very vigilant,” he said. “If it becomes apparent that the current energy price increases will translate into broad consumer price inflation in the medium term, the Governing Council of the ECB will act decisively in a timely manner.”
He said the ECB should apply a “wait-and-see approach”, and that “discussions about falling short of our inflation target are likely to be over for the time being.”
However, he said it was “still too early” to assess the medium- to long-term impact of this situation on the outlook.
Related articles:
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- ECB’s Šimkus: Must “Stay Calm”, Not “Overreact” to Iran Conflict
- ECB’s Müller: Chances of Next Move Being a Rate Hike Have Increased Amid Iran Conflict
