The European Central Bank raised its inflation forecasts for 2027 and 2028,
citing continued inflationary pressure from the Middle East war. ECB staff now
project overall inflation at 2.5% in 2027 and 2.1% in 2028, up from 2.3% and
2.0% in the June projections; this year’s forecast remains 3.0%. Core inflation
excluding energy and food was nudged up 0.1pp to 2.6% in 2027 and 2.3% in 2028;
core for this year stays at 2.5%. The ECB said inflation risks are tilted to the
upside and that inflation will remain well above target for an extended period.
