world-economy

ECB Officials Split on Rate Path as Iran War Inflation Effects Remain Uncertain

European Central Bank policymakers are divided on whether to continue raising interest rates, with the full scope of inflation pressures from the Iran conflict still unclear. Governing Council member Olaf Sleijpen said the extent of the shock remains to be determined, while peer Pierre Wunsch indicated the case for another rate increase has weakened. Chief Economist Philip Lane cautioned that energy price ripple effects will take time to materialize. The central bank will avoid committing to a predetermined interest rate trajectory. The mixed signals come as French inflation unexpectedly retreated to the ECB's 2% target in recent data, driven by declining energy costs. The divergent views suggest policymakers will adopt a wait-and-see approach pending clearer inflation readings in coming months.