TENSIONS in the Middle East could lead to upward pressure on inflation in the Eurozone and affect economic growth, research from the European Central Bank (ECB) showed yesterday.
“Risks to the medium-term outlook for price developments remain on the upside,” reads the ECB’s April bulletin.
“They relate to higher than assumed increases in energy prices, not least owing to ongoing political tensions in North Africa and the Middle East.”
The inflation rate in the Eurozone was registered at 2.6 per cent in March.
The ECB’s bulletin said it will “continue to monitor very closely all developments with respect to upside risks to price stability”.
Last week the ECB raised rates for the first time in almost three years.