Eurozone Inflation Threatened by Extended Middle East Conflict

European Central Bank policymaker Olli Rehn has warned that an extended conflict in the Middle East could lead to sustained inflationary pressures in the Eurozone. In an interview with the Financial Times, Rehn stated that 'We must show no complacency in the face of these inflationary pressures.'

The concern is driven by energy prices being pushed up by the ongoing war between the US and Israel on one side and Iran on the other, as well as the near closure of the Strait of Hormuz shipping channel.