ECB Watches Eurozone Inflation Closely Amid Rising Gas Prices

The European Central Bank (ECB) is keeping a close eye on rising natural gas prices and their potential impact on eurozone inflation. According to Banco de Portugal Governor Álvaro Santos Pereira, who is also a member of the ECB's Governing Council, inflation has yet to spread as quickly as it did during the 2022 episode.

Pereira stated that while the situation still requires monitoring over the coming months, there are no signs of broadening inflationary pressures at this point. However, he emphasized the importance of vigilance and warned that 'it does not mean it cannot happen.'

The ECB recently raised eurozone interest rates for the second time this year, with financial markets expecting at least three further rate increases over the next 12 months. Pereira is also keeping a close eye on the rapid growth of investment in artificial intelligence and its potential impact on global economic growth and inflation.