Isabel Schnabel highlights geopolitical tensions as a growing risk to price stability in the eurozone.
European Central Bank Executive Board member Isabel Schnabel flagged escalating tensions in the Middle East as a potential driver of higher inflation. The warning comes amid rising energy prices and supply chain disruptions linked to the Iran conflict.
Schnabel’s remarks follow recent ECB projections that assumed stable energy costs. Analysts had expected inflation to ease further in 2024, but geopolitical risks could derail that outlook. The ECB has maintained a cautious stance on rate cuts despite slowing price growth.
Markets showed limited reaction, with eurozone bond yields holding steady. Investors continue to monitor Middle East developments for signs of broader economic impact.