If the European Central Bank adjusts interest rates in the next six months, the move would likely be a cut, ECB policymaker Francois Villeroy de Galhau said on Thursday.
Speaking at the European University Institute in Italy, Villeroy said that barring a major external shock - including possible new military developments in the Middle East - any policy change by the ECB would likely aim to further accommodate growth.
The ECB this month signalled a pause in policy easing, even as projections show inflation dipping below its 2% target, reviving concerns about a return to ultra-low inflation.
Oil prices have surged 7% after Israeli strikes on Iran triggered missile retaliation. Villeroy, who is also governor of the Bank of France, said the ECB would watch closely for energy price spillovers into broader inflation trends.
He noted that the euro’s recent strength helps cushion the impact of rising oil prices: a 10% euro appreciation offsets the inflationary effect of a 10 euro oil price rise.
Market pricing now suggests a greater risk of euro zone inflation undershooting the ECB’s 2% target. ECB forecasts see inflation falling below 2% in Q2 this year and returning to target by 2027, aided by a new emissions trading system.
"In such a context, we need to remain alert and agile in all our next meetings," Villeroy added.
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Iran suggested it would be "unreasonable" to proceed with talks to forge a permanent peace deal with the U.S. after Israel pounded Lebanon with its heaviest strikes yet on Wednesday, killing hundreds of people. The warning came from Iran's lead negotiator, parliament speaker Mohammed Bager Qalibaf.
Italian Prime Minister Giorgia Meloni said on Thursday (9 April) that restoring freedom of navigation in the Strait of Hormuz is a vital interest for both Italy and the European Union, pledging coordination with international partners to ensure safe passage.
Astronauts aboard Artemis II have described the emotional toll of their historic journey as they prepare for a high-risk “fireball” re-entry. The crew is set to splash down off California on Friday (10 April) after travelling farther than any humans in history.
Iranian officials have criticised ceasefire violations by Isreal and U.S., citing Israeli airstrikes on Lebanon on Wednesday (8 April), an intrusion of a military drone, and a U.S. denial of Tehran’s right of nuclear enrichment, on the first day of the two-week ceasefire on Wednesday.
China and Russia vetoed a United Nations Security Council resolution on Tuesday aimed at coordinating defensive efforts to protect commercial shipping in the Strait of Hormuz, leaving no agreed international framework for securing the vital route.
Lebanon’s Hezbollah said it had stopped firing on northern Israel and Israeli forces on Wednesday as part of a two-week ceasefire in the Middle East brokered between the United States and Iran. However, a Hezbollah lawmaker warned that the pause could collapse if Tel Aviv does not adhere to it.
Pakistan’s Prime Minister Shehbaz Sharif said Iran and the United States, along with their allies, have agreed to an immediate two-week ceasefire covering all areas, but Israel says the deal excludes Lebanon. Tel Aviv says the U.S. is committed to achieving shared goals in upcoming negotiations.
Construction has begun on a major new solar power project in Xizang, as China continues to expand its renewable energy capacity and push towards a greener future.
Iran suggested it would be "unreasonable" to proceed with talks to forge a permanent peace deal with the U.S. after Israel pounded Lebanon with its heaviest strikes yet on Wednesday, killing hundreds of people. The warning came from Iran's lead negotiator, parliament speaker Mohammed Bager Qalibaf.
Walt Disney is planning to cut up to 1,000 jobs in the coming weeks, with many of the reductions expected to affect its marketing division, The Wall Street Journal reported on Wednesday, citing sources familiar with the plans.
Major automakers showcased new electric vehicles at the New York Auto Show this week, under the slogan “electrification is the future." However, weakening demand in the United States and intense competition with China are raising questions for markets across the globe, including the South Caucasus.
The U.S. national average retail price of petrol rose above $4 a gallon for the first time in over three years on Monday (30 March), according to GasBuddy data, as the U.S.–Israeli war with Iran continued to roil global energy markets.
Japan and Indonesia will deepen coordination on energy security, Tokyo said, as the U.S.-Israeli war on Iran disrupts vital oil and gas flows to Asia.
China's three largest state-owned airlines have issued warnings regarding their financial outlook for the current year, acknowledging that the eruption of war involving Iran has driven jet fuel prices to unsustainable highs.
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