European Central Bank head Christine Lagarde said Wednesday that businesses in Europe might be quicker to raise prices in response to the Iran war due to bitter memories of energy price inflation after Russia invaded Ukraine.
She said the inflation that peaked in 2023 in double digits “left a mark” and firms “may be faster than last time” to change price tags.
The last time was 2022, when inflation hit double digits in Europe after Russia cut off most natural gas supplies over the war, sending gas and electricity prices higher.
The Iran war has sharply increased oil prices, raising fuel, travel and manufacturing costs.
Lagarde said the big question is how long the higher oil prices last.
