The European Central Bank (ECB) may raise its key interest rates again, despite the positive news about the signing of a memorandum between the United States and Iran, ECB Chief Economist Philip Lane said.
Last week, as expected, the ECB raised all three key interest rates by 25 basis points. Specifically, the deposit rate now stands at 2.25% per annum. The regulator also raised its inflation forecast for the eurozone for the current year to 3% from the previously expected 2.6%.
The decision was made before news broke that Iran and the U.S. had reached an agreement that would end hostilities in the Middle East and restore shipping traffic through the Strait of Hormuz. Since then, energy prices have fallen, but Lane noted that they have not yet returned to pre-war levels.
"The decision on whether to raise rates further or keep them at their current level will depend on incoming data," Lane said.
