Ukraine crisis and high inflation risks loom over ECB meeting

Ukraine crisis and high inflation risks loom over ECB meeting

FRANKFURT: European Central Bank governors meet Thursday to ponder record-high inflation and fresh economic uncertainty caused by the war in Ukraine, with policymakers signaling a willingness to take action sooner rather than later. At its last meeting in March, the ECB said it would accelerate the winding down of its bond-buying stimulus, with a view to ending the scheme in the third quarter. An interest rate hike-the ECB’s first in over a decade-would follow “some time” after that, it said. But since then prices have continued to spiral, with costs for energy, commodities and food surging in the wake of the war in Ukraine, adding to fears that the conflict will stunt a post-COVID recovery.

The US Federal Reserve and the Bank of England have already announced their first rate hikes to combat price pressures, leaving the ECB looking out of step. Inflation jumped to a record 7.5 percent in the euro area last month, well beyond the ECB’s two-percent target. Although no major policy changes are expected on Thursday, ECB chief Christine Lagarde’s press conference will be scoured for clues of the bank shifting into more aggressive inflation-fighting mode. “In our view, policymakers are likely to bring forward their plans to raise interest