ECB Sees 3% Inflation Lasting Into 2027 as El Nino Lifts Food Prices
Updated
Updated · RTÉ News · Aug 18
ECB Sees 3% Inflation Lasting Into 2027 as El Nino Lifts Food Prices
3 articles · Updated · RTÉ News · Aug 18
Summary
Philip Lane said food prices will become a main driver of euro-zone inflation into 2027, with the impact expected to show most clearly by summer 2027.
3% inflation should hover through the rest of 2026, he said, above the ECB’s 2% target, while the path ahead depends heavily on oil and gas prices.
Brent crude above $90 a barrel has added to that uncertainty after efforts to end the US war with Iran failed, raising the risk that a longer Middle East conflict worsens the outlook.
0.3%-0.4% growth in Europe is still relatively solid, Lane said, but firms are weighing whether to pass on higher costs, absorb them through lower profits or cut activity.
Rate decisions will hinge on keeping inflation at 2%, he said, while governments should use temporary, targeted support rather than broad subsidies and keep fiscal discipline ahead of Ireland’s October budget.