Middle East Conflict Escalates Risks, European Central Bank Maintains 2% Interest Rate
The European Central Bank maintained interest rates today, warning that economic growth and inflation prospects face increasing risks due to the Middle East conflict. The closure of the Strait of Hormuz has led to a significant surge in energy costs, with Eurozone inflation rising to 3% in April, exceeding the ECB's 2% target.
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- 📰 Published: April 30, 2026 at 22:41
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Central News Agency (Frankfurt, Central News Agency comprehensive foreign report on the 30th) The European Central Bank today maintained interest rates unchanged, and warned that economic growth and inflation prospects face increasing risks due to the Middle East conflict.
Agence France-Presse reported that since the United States and Israel launched a war against Iran, the Strait of Hormuz has been almost completely closed. About one-fifth of global oil and natural gas transportation relies on this waterway, leading to a significant surge in energy costs.
Eurozone inflation is rising, reaching 3% in April, higher than the European Central Bank's target of 2%. However, concerns about inflation must still be weighed against another risk: if borrowing costs are raised, it could further suppress already weak economic growth.
In a statement announcing its decision, the European Central Bank stated: "Both upside risks to inflation and downside risks to economic growth have increased. The longer the war lasts and the longer energy prices remain high, the stronger the impact on overall inflation and the economy may be."
Before the meeting, analysts had expected the European Central Bank to maintain the main deposit rate at 2%. This rate has remained unchanged since June last year, mainly because the central bank is still observing the impact of the war situation.
UniCredit noted in its report that it does not believe there is an urgent need for the European Central Bank to take immediate action, especially since inflation was already close to the official target before the conflict erupted.
The report pointed out: "The weakening demand outlook, especially the decline in private consumption momentum, gives the European Central Bank more reason to remain patient." (Compiler: Chen Yuting) 1150430
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Agence France-Presse reported that since the United States and Israel launched a war against Iran, the Strait of Hormuz has been almost completely closed. About one-fifth of global oil and natural gas transportation relies on this waterway, leading to a significant surge in energy costs.
Eurozone inflation is rising, reaching 3% in April, higher than the European Central Bank's target of 2%. However, concerns about inflation must still be weighed against another risk: if borrowing costs are raised, it could further suppress already weak economic growth.
In a statement announcing its decision, the European Central Bank stated: "Both upside risks to inflation and downside risks to economic growth have increased. The longer the war lasts and the longer energy prices remain high, the stronger the impact on overall inflation and the economy may be."
Before the meeting, analysts had expected the European Central Bank to maintain the main deposit rate at 2%. This rate has remained unchanged since June last year, mainly because the central bank is still observing the impact of the war situation.
UniCredit noted in its report that it does not believe there is an urgent need for the European Central Bank to take immediate action, especially since inflation was already close to the official target before the conflict erupted.
The report pointed out: "The weakening demand outlook, especially the decline in private consumption momentum, gives the European Central Bank more reason to remain patient." (Compiler: Chen Yuting) 1150430
Choose to stand with facts, every sponsorship you make is a force to protect press freedom.
Download the Central News Agency's "First-hand News" APP to stay updated with the latest news.
The text, images, and videos on this website may not be reproduced, publicly broadcast, or publicly transmitted and used without authorization.