ECB Warns of Prolonged Conflict Inflation Risks

ECB policymaker Olli Rehn has warned that an extended conflict in the Middle East could keep inflation high in the Eurozone. He believes the European Central Bank must prepare for a prolonged 'conflict of attrition' that would push up energy prices. The conflict is between the US and Israel on one side, and Iran and the near closure of the Strait of Hormuz shipping channel.

Rehn emphasized that the ECB should not be complacent in the face of these inflationary pressures. He referred to the recent surge in energy prices due to the ongoing war, which has led to concerns about elevated inflation levels in the Eurozone. The comments from Rehn come as the ECB is set to review its monetary policy in response to rising inflation.