European Central Bank Executive Board member Frank Elderson has stated that price pressures stemming from the conflict involving Iran are becoming increasingly difficult to ignore.

He commented on Wednesday, stating that risks to inflation are moving higher while risks to economic growth are moving lower, with the situation clearly deteriorating. He added that it is becoming increasingly unlikely to simply overlook this shock.

ECB policymakers are scheduled to hold their interest rate meeting in Frankfurt in one week. Market expectations widely anticipate a decision to raise interest rates by 25 basis points.

Elderson noted that second-round effects have not yet been observed. However, he emphasized that the longer the conflict persists and the more prolonged and intense the shock becomes, the higher the likelihood of such effects materializing.