War Disrupts Energy Markets, ECB Plans to Maintain Interest Rate Watch
The European Central Bank (ECB) is expected to keep interest rates unchanged this week, closely monitoring whether the inflation surge triggered by the Middle East war is a short-term phenomenon or is beginning to drag down economic growth. Economists note that while energy prices are rising, the impact is not as dramatic as during the 2022 Russia-Ukraine war.
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- 📰 Published: April 27, 2026 at 15:13
- 🔍 Collected: April 27, 2026 at 15:32 (19 min after Published)
- 🤖 AI Analyzed: April 27, 2026 at 15:51 (18 min after Collected)
Major News on US-Iran War
Central News Agency (Frankfurt, 26th, Comprehensive Foreign Report) - The European Central Bank (ECB) is expected to maintain interest rates this week, continuing to observe whether the inflation surge triggered by the Middle East war is a short-term phenomenon or has begun to drag down economic growth.
Agence France-Presse reported that after the US and Israel jointly launched a war against Iran, global energy supplies were impacted, and the market anticipated that the ECB might further raise interest rates. The Middle East conflict led to a sharp rise in energy prices, pushing up consumer prices in the eurozone.
The report pointed out that the eurozone's inflation rate reached 2.6% in March, higher than the ECB's target of 2%; the ECB warned that in the worst-case scenario, inflation could further significantly climb.
Despite this, economists generally expect the ECB to remain on hold at its April 30th meeting, keeping the benchmark deposit rate at 2%.
US President Trump has extended the ceasefire with Iran to allow more time for peace talks; although most attacks in the region have ceased, the Strait of Hormuz remains largely closed.
Economists noted that while energy prices have risen, the increase is not as dramatic as after Russia's full-scale invasion of Ukraine in 2022, nor have supply chains experienced the same level of disruption.
●No rush to act
Although the market still remembers the criticism the ECB received in 2022 for being too slow to raise interest rates, policymakers have signaled that they are not rushing to act.
Martins Kazaks, a member of the ECB Governing Council, told the Financial Times last week: "We are in no rush. We still have enough room to gather data and make judgments."
Further interest rate hikes could also put pressure on the fragile eurozone economy, especially as manufacturing faces new challenges from the energy shock.
●Double Uncertainty
The future trajectory largely depends on whether Iran and the US can reach a lasting agreement to ensure a stable supply of Persian Gulf oil and natural gas through the Strait of Hormuz.
The market will closely watch ECB President Christine Lagarde's post-meeting press conference for clues on the interest rate outlook.
Lagarde stated last week that the current situation presents "double uncertainty" because it is impossible to determine how long the impact will last or to predict its effect on the overall economy.
She said: "The conflict situation is constantly changing—war, ceasefire, peace talks, breakdown, maritime blockade, lifting, resuming blockade, making it especially difficult to assess the duration and extent of the consequences."
Nevertheless, most economists still believe the ECB will not adjust interest rates for now.
Bruno Cavalier, an economist at financial services group Oddo BHF, said the current situation is "completely different" from 2022.
He said: "The conditions for non-energy prices and wage increases are not yet present, and the ECB still has room to 'sit tight' for now." (Compiler: Liu Wen-yu) 1150427
Central News Agency (Frankfurt, 26th, Comprehensive Foreign Report) - The European Central Bank (ECB) is expected to maintain interest rates this week, continuing to observe whether the inflation surge triggered by the Middle East war is a short-term phenomenon or has begun to drag down economic growth.
Agence France-Presse reported that after the US and Israel jointly launched a war against Iran, global energy supplies were impacted, and the market anticipated that the ECB might further raise interest rates. The Middle East conflict led to a sharp rise in energy prices, pushing up consumer prices in the eurozone.
The report pointed out that the eurozone's inflation rate reached 2.6% in March, higher than the ECB's target of 2%; the ECB warned that in the worst-case scenario, inflation could further significantly climb.
Despite this, economists generally expect the ECB to remain on hold at its April 30th meeting, keeping the benchmark deposit rate at 2%.
US President Trump has extended the ceasefire with Iran to allow more time for peace talks; although most attacks in the region have ceased, the Strait of Hormuz remains largely closed.
Economists noted that while energy prices have risen, the increase is not as dramatic as after Russia's full-scale invasion of Ukraine in 2022, nor have supply chains experienced the same level of disruption.
●No rush to act
Although the market still remembers the criticism the ECB received in 2022 for being too slow to raise interest rates, policymakers have signaled that they are not rushing to act.
Martins Kazaks, a member of the ECB Governing Council, told the Financial Times last week: "We are in no rush. We still have enough room to gather data and make judgments."
Further interest rate hikes could also put pressure on the fragile eurozone economy, especially as manufacturing faces new challenges from the energy shock.
●Double Uncertainty
The future trajectory largely depends on whether Iran and the US can reach a lasting agreement to ensure a stable supply of Persian Gulf oil and natural gas through the Strait of Hormuz.
The market will closely watch ECB President Christine Lagarde's post-meeting press conference for clues on the interest rate outlook.
Lagarde stated last week that the current situation presents "double uncertainty" because it is impossible to determine how long the impact will last or to predict its effect on the overall economy.
She said: "The conflict situation is constantly changing—war, ceasefire, peace talks, breakdown, maritime blockade, lifting, resuming blockade, making it especially difficult to assess the duration and extent of the consequences."
Nevertheless, most economists still believe the ECB will not adjust interest rates for now.
Bruno Cavalier, an economist at financial services group Oddo BHF, said the current situation is "completely different" from 2022.
He said: "The conditions for non-energy prices and wage increases are not yet present, and the ECB still has room to 'sit tight' for now." (Compiler: Liu Wen-yu) 1150427