ECB Policymaker Warns of Potential Inflation Risks Amid Gas Price Surge

European Central Bank (ECB) policymaker Álvaro Santos Pereira said inflation in the euro zone is not spreading as widely as it did in 2022. Speaking at a European Economics and Financial Centre event, Pereira mentioned that while policymakers are keeping a close eye on developments, particularly with regards to recent gas price surges.

The ECB raised interest rates for the second time this year last week, and financial markets are pricing at least three more hikes over the next 12 months. Pereira emphasized the need to monitor inflation closely in the coming months, as a rapid broadening of prices could have significant implications for monetary policy.

Pereira pointed out that natural gas price increases were one of the key factors he was currently watching, along with the impact of the AI boom on global growth and inflation. He acknowledged that there are several risks that have risen in recent months, which will likely influence ECB decisions moving forward.