Berenberg Bank: Even if the war continues, the European Central Bank can still cope with energy price shocks

Golden Ten Data reported on March 16 that Berenberg Bank stated if the Iran war lasts for a few more weeks, the European Central Bank may be able to cope with this temporary inflation shock. However, even if the conflict continues, the European Central Bank will still find it difficult to raise interest rates due to the economic stagnation caused by the energy price shock. ECB President Lagarde may prioritize stabilizing the market at this week's meeting by signaling intentions to control inflation expectations. The next move is still likely to be a rate hike, but it will have to wait until the second half of 2027, when higher wage growth will force the ECB to gradually raise the deposit rate from the current 2.0% to 3.0%.