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MNI BRIEF: Mid-East Oil Shock Milder Price Dynamic To Ukraine

(MNI) Rome

Higher energy prices as a consequence of the crisis in the Middle East would push inflation higher in the short term but it would have a lesser impact than the fallout of the war in Ukraine over the medium term, Bank of Spain governor Pablo Hernandez de Cos said on Thursday.

Higher interest rates and “very weak activity” in the Eurozone supports that view, de Cos said, noting that for containing inflation , keeping inflation expectations anchored would be “crucial”

“Geopolitical risks, in particular the possible extension of the war in the Middle East, remain the main determinant of economic developments and inflation in the euro area,” Hernandez de Cos said, adding that downside growth risks are materializing while inflation is evolving as the European Central Bank expects.

MNI Rome Bureau | +34-672-478-840 |
MNI Rome Bureau | +34-672-478-840 |

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