European Central Bank: The Impact of Red Sea Attacks on Inflation is Uncertain

Chief Economist of the European Central Bank, Philip Lane, indicated today, Wednesday, that "the bank is monitoring the situation in the Red Sea, but it is unclear whether the attacks on ships will affect inflation and in what direction." Speaking to an audience in Dublin, he stated, "It is clear that bottlenecks of any kind represent a significant problem." He added, "However... regarding the net impact on inflation, there are pressures in all directions there." Lane pointed out the "decline in energy prices since the beginning of the conflict in Gaza between Israel and the Palestinian Islamic Resistance Movement 'Hamas,' demonstrating how geopolitical risks can affect confidence, lead to a decline in investment, and make people fearful about the future."