ECB Governing Council member Martin Kochel said that the recent rise in the energy market poses a risk to the Austrian and Eurozone inflation forecasts released in September. On Tuesday, he said at a meeting of the Austrian Financial Markets Supervisory Authority: “Meanwhile, energy prices have risen slightly again. This means that the risk of higher inflation and a possible slowdown in economic growth is once again increasing.” Due to the rise in energy costs due to the war in Iran and the shortage of diesel, ECB policymakers have been evaluating whether these costs are being transmitted to other sectors of the Eurozone economy and use this to determine whether further measures are needed to ensure that inflation falls back to the target level of 2% in the medium term. After two interest rate hikes this year, people familiar with the matter revealed to Bloomberg last month that officials expect interest rates to rise further, but any action will depend on upcoming data. Colleagues including Bundesbank President Joachim Nagel and Bank of Finland Governor Olli Rehn recently said that there is no sign that inflation is affecting wages. Kochel said that overall, the Eurozone economy has shown resilience to geopolitical shocks and high energy prices, but uncertainty is increasingly affecting financial markets. “Geopolitical tension, fiscal challenges, and possible sharp market adjustments remain core risk factors,” Kochel said.

ECB Governing Council member Martin Kochel said that the recent rise in the energy market poses a risk to the Austrian and Eurozone inflation forecasts released in September. On Tuesday, he said at a meeting of the Austrian Financial Markets Supervisory Authority: “Meanwhile, energy prices have risen slightly again. This means that the risk of higher inflation and a possible slowdown in economic growth is once again increasing.” Due to the rise in energy costs due to the war in Iran and the shortage of diesel, ECB policymakers have been evaluating whether these costs are being transmitted to other sectors of the Eurozone economy and use this to determine whether further measures are needed to ensure that inflation falls back to the target level of 2% in the medium term. After two interest rate hikes this year, people familiar with the matter revealed to Bloomberg last month that officials expect interest rates to rise further, but any action will depend on upcoming data. Colleagues including Bundesbank President Joachim Nagel and Bank of Finland Governor Olli Rehn recently said that there is no sign that inflation is affecting wages. Kochel said that overall, the Eurozone economy has shown resilience to geopolitical shocks and high energy prices, but uncertainty is increasingly affecting financial markets. “Geopolitical tension, fiscal challenges, and possible sharp market adjustments remain core risk factors,” Kochel said.