Russia’s war in Ukraine raises inflation, justifying the European Central Bank’s decision to speed up its exit from the extremely loose monetary policy, said the board member. of Finland, Olli Rehn.
“With inflation soaring, there is good reason to accelerate the normalization of monetary policy,” Rehn said in a statement.
The European Central Bank (ECB) promised to raise interest rates by 25 basis points in July and hinted that there would be a larger increase in September to reduce inflation, which hit a record high of 8.1% last month in the eurozone.
While rising energy prices are likely to pass over time, inflation is now extending to a wide range of goods and services, increasing the risk of it getting stuck at a relatively high level.
“The impact of Russia’s violent war is being felt around the world, and people have to pay higher prices for energy and food,” Rehn added.
Source: Capital
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