HELSINKI, April 14 (Reuters) – A rate hike is not self-evident at the European Central Bank’s next policy meeting on April 30, ECB policymaker Olli Rehn said on Tuesday, adding that the ECB was closely monitoring the Middle East conflict and its spillover effects on the economy.
A rise in headline inflation this year will be unavoidable, the Bank of Finland governor said.
But over the medium term, it remained unclear what effect the war would have on inflation, he said.
“A rate hike is not self-evident, but we have to proceed by keeping calm and closely analysing the effects of the war in Iran and the closure of Strait of Hormuz on the economy,” he told reporters, when asked about the next rate meeting.
The strength of the war’s impact on each of the euro area countries varied, Rehn added.
“The impact on the Finnish economy is moderated by the fact that Finland has made more rapid progress in the energy transition than many other countries,” he said.
The Middle East war highlights how vital the green transition in energy is for Europe’s resilience and competitiveness, Rehn said. “Slowing the green transition now would be a serious mistake.”
(Reporting by Anne Kauranen in Helsinki; Editing by Andrew Heavens and Janane Venkatraman)
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