By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Joachim Nagel said on Tuesday that large or persistent effects from the Middle East conflict on inflation would require action from the ECB.

Speaking in Zurich, Nagel, who heads the Deutsche Bundesbank, said that the ECB will “come together in June and then we will decide on the new data set.”

“Should the effects [of the energy price shock] prove large or persistent, and especially if they threaten to de-anchor long-term inflation expectations, our mandate requires us to act,” he added.

Nagel said the ECB’s baseline scenario incorporated two interest rate hikes, reflecting the market expectations in place when the staff projections were prepared.

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