The European Central Bank (ECB) is back to square one in its fight against high inflation in the euro zone after new hostilities between the US and Iran caused energy prices to rise again, ECB policymaker Yannis Stournaras has said, Reuters reports.

The ECB raised rates at its June 10-11 meeting and investors expect it to do so twice more over the next year to contain the fallout from the Iran war on fuel costs.

“Hostilities started again,” Stournaras, the Greek central bank governor, has said at an event in Greece.

“So we’re back to square one and that shows how precarious and volatile is the situation in the Middle East and, as a consequence, it also shows the uncertainty surrounding inflation forecasts and therefore the challenges that policy has to face.”