ECB’s Quaden Says New Oil-Price Jump Could Handicap Recovery

Feb. 23 (Bloomberg) -- European Central Bank Governing Council member Guy Quaden said a new jump in oil prices could “handicap” the economy’s recovery as the uprising in Libya pushed crude to the highest in more than two years.

“We have noticed in the U.S. and Europe there are evidently a number of uncertainties,” Quaden said on Bel-RTL radio in Brussels today. “If the price of oil would again flare up, then this would be a factor that could handicap this economic recovery, but not yet.”

ECB policy makers are growing more concerned that soaring energy prices will help entrench faster inflation. Those concerns are being exacerbated as the violence in Libya threatens to disrupt exports from Africa’s third-biggest supplier and spread to other crude-producing nations.

Crude-oil prices have surged 30 percent over the past six months and reached $96.25 today, the highest since 2008. That has helped push inflation in the euro region to 2.4 percent, the fastest since October 2008 and above the ECB’s ceiling of just below 2 percent.

“The goal of the European Central Bank and the affiliate nation banks is to limit inflation,” said Quaden, who also is head of Belgium’s central bank. “It is to guarantee the purchasing power of our common currency.”

The euro gained for the first time in three days versus the dollar on speculation rising energy costs will put further pressure on ECB policy makers to raise interest rates. The euro traded at $1.3712 at 11:37 a.m. in Brussels, up 0.5 percent on the day.

Quaden and ECB President Jean-Claude Trichet speak later today in Liege, Belgium.

(Source: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akU27Wc75W38)