Increases in the price of petrol The rise to international oil prices after Israel’s military attack in Iran. Such a development will come to be added to the pressures that its prices already accept power because of the summer.
The combination of these two increases (in electricity and gasoline) will increase inflationary trends (and) in the Greek economy, at the moment – in fact – that there are recovery trends in the general index Consumer prices. This will burden the budgets of both households and businesses, increasing the cost of living and operating costs respectively.
This will mean a decrease in the real income of households (something that “hurts” especially in a holiday period as it could lead to increased shipping costs, both by car as a ferry) and a decrease in business (and/or profits) of businesses …
And this, while until recently, the fall in international oil prices was a key factor in deflation in Europe, which facilitated European Central Bank decisions to further reduce lending rates and thus reduce the cost of borrowing households and businesses.
In this respect, and if the tension between Israel -Iran continues (as much as it is escalated) and thus increasing oil prices may justify views within the ECB (such as Bank of Greece Governor Yiannis Stournaras), who have proposed a temporary cessation.
This is because a possible recovery of inflation in the EU (due to rising international oil prices) would be a deterrent to the reduction of ECB interest rates, as high interest rates play the role of “breakwaters” in inflationary pressures.
Further, if the prices upward upward the EU (due to oil) will be affected by the “narrative” of Brussels, according to which there could be deflationary pressures in Europe (which would be positive to a point …) due to a possible increase in (cheap) imports.
In other words, the EU’s basic argument against commercial Trump policy will be affected, according to which the US will be hit by stagnant – inflation (ie a combination of high inflation and recession), while the EU – not making tariffs in the US – will have a reduction in inflation and a slight decline in economic growth …