Fears of a US strike on Iraq are helping to fuel "uncertainties" in the world economy, European Central Bank president Mr Wim Duisenberg said today.
He said the impact of a war on the ECB's monetary policy was unpredictable at this stage, as it would depend on the scale of any military action and its effect on the oil market.
Mr Duisenberg said rising crude prices were an inflationary risk and a "threat" to the pace of economic recovery.
He was speaking at a press conference after the ECB announced that it was holding its key interest rate steady at 3.25 per cent.