ECB Governing Council member Stournaras said an unexpected fall in energy prices
and slowing euro-area inflation may mean the bank does not need to tighten
policy further after a June rate increase. Euro-area CPI eased to 2.8% YoY,
below forecasts, which he called a clear downside surprise. He said attention
should shift to how firms pass through energy-cost changes and how AI-driven
investment could alter price dynamics. "I don't expect any change in July unless
things deteriorate significantly," he said, and he favors keeping policy
unchanged for a period. The ECB has already raised rates to 2.25%. Stournaras
cited Gulf central bankers' assessments that recent shocks caused limited damage
to energy infrastructure and said Iran may release more crude, countering prior
market tightness assumptions. He warned energy-price rises transmit quickly to
consumer prices while declines pass through more slowly, reflecting limited
competition in parts of Europe, and noted AI investment could weigh on
electronics prices, notably imports from Korea and Taiwan.
