The ECB was burned by being late to react after Russia's invasion of Ukraine in 2022, but the peace deal in the Middle East raises the risk that this time it made an error of hiking rates too soon.
Amid the most recent surge in energy prices following the outbreak of the war in the Middle East, eurozone headline inflation has risen sharply.
It printed at 3.2% in May, its highest level since September 2023 and up from just 1.7% at the start of the year. Perhaps unsurprisingly, then, the ECB hiked rates by 25bps last week, bringing the deposit rate up to 2.25%. The outcome was in line with market expectations.
Join Jane Kavanagh from AIB's Corporate Treasury desk alongside David McNamara, Chief Economist, for this latest edition of AIB Market Talk. Using AIB's latest Irish Economic Outlook as the foundation, Jane and David unpack the key insights, exploring the global backdrop and the risks shaping growth, inflation and consumer behaviour in the year ahead.
