Middle East tensions pose the biggest threat to rate cuts, European Central Bank policymaker says [Video]

Tensions in the Middle East pose the biggest threat to a prospective interest rate cut from the European Central Bank, according to ECB policymaker Robert Holzmann.

“At this stage, I think the biggest threat is geopolitics, because we have seen what’s happened in the Middle East,” Austrian central bank Governor Holzmann told CNBC’s Karen Tso on Wednesday. His comments came on the sidelines of the International Monetary Fund Spring Meetings.

“As you can imagine, only when a boat is sunk in the [Strait] of Hormuz and you may have a different oil price, and this of course may require us to rethink our strategy,” he added.

Holzmann singled out ramifications for energy prices as the single most important factor in terms of Europe’s fight to tame inflation. He added that an abrupt rise in oil prices, for example, would …