The European Central Bank warns that prolonged conflicts combined with sustained high energy prices intensify inflation risks and economic instability, as demonstrated by their decision to maintain interest rates while noting that the longer wars continue and energy prices remain elevated, the stronger the impact on broader inflation and economic growth becomes.
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The Governing Council today decided to keep the three key ECB interest rates unchanged.
While the incoming information has been broadly consistent with our previous assessment of the inflation outlook, the upside risks to inflation and the downside risks to growth have intensified. The longer the war continues and the longer energy prices remain high, the stronger is the likely impact on broader inflation and the economy.
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