Business
Iran War Scrambles Calculus for Central Banks
Europe’s top central bankers warned that the escalating war in the Middle East would drive up inflation and knock growth.
The conflict is threatening the global economy, but Europe is seen as particularly vulnerable because of its dependence on imported energy. European-natural gas prices have nearly doubled since the conflict began.
“The war in the Middle East has made the outlook significantly more uncertain, creating upside risks for inflation and downside risks for economic growth,” ECB President Christine Lagarde said Thursday.
The European Central Bank and its counterparts in the U.K., Switzerland and Sweden all left rates unchanged Thursday. That follows the Federal Reserve’s decision to keep rates steady a day earlier. The Bank of Canada and the Bank of Japan have made the same call this week.
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