The European Central Bank (ECB) is unlikely to adjust interest rates at its upcoming meeting, according to ECB policymaker Jose Luis Escriva. Speaking on Catalan TV3, Escriva emphasised the need for more time to fully assess the impact of the ongoing conflict in the Middle East before making any definitive decisions regarding monetary policy. The central bank aims to evaluate how persistent the effects will be over time.
Escriva acknowledged that the war could have implications for inflation and euro zone growth, primarily through increased energy costs and supply chain disruptions. However, he suggested that these effects could be limited if the conflict were to resolve quickly, noting the impact on everyday consumer prices may only be marginal. The ECB is committed to its medium-term inflation target of 2%, and aims to avoid reacting to short-term fluctuations.
Escriva, who also serves as the Bank of Spain’s governor, addressed potential concerns regarding trade relations between Spain and the United States. He stated that it was too early to determine the impact of any trade halt following President Trump’s threats to cut commercial ties. Furthermore, Escriva expressed confidence that Santander’s planned $12.2 billion acquisition of U.S. lender Webster should proceed unaffected, as the deal is subject to established regulatory processes.
