The current scenario in the energy sector, with high prices and shortages, has led the European Central Bank to take a more serious stance regarding possible measures if inflation in the region continues to rise.

Currently, there is considerable concern and mistrust due to rising fuel prices, shortages, and increased electricity prices as a consequence of the Iran conflict.

In this regard, the Governor of the Bank of France and member of the ECB Governing Council, François Villeroy de Galhau, stated that “the institution will do whatever is necessary to bring inflation back to the 2 % target in the medium term.”

Amid the escalating conflict in the Middle East, Eurozone inflation rose to 3 % in April, up from 2.6 % in March. “The increase coincided with a surge in energy prices, particularly gasoline, diesel, and jet fuel, which have skyrocketed in recent months.”

The ECB’s main concern is that the effects of the war will spill over into key sectors for each country, such as “wages, inflation expectations, and pricing across the economy—what is known in monetary policy as second-round effects.”

M.Pino

Source: diariobitcoin

(Reference image source: Guillaume Périgois on Unsplash)

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