ECB staff are set to raise growth forecasts for this year and next to reflect
economic resilience, but with inflation still above 3% the bank may delay the
return to its 2% target; in June it had projected hitting 2% by next summer. The
new outlook may understate the impact of the recent energy-price spike,
particularly in natural gas. Barclays says current gas prices sit between its
adverse and severe shock scenarios and that gas shocks transmit to non-energy
inflation more slowly than oil but with larger, more persistent effects.
