ECB chief economist LANE said a renewed energy-price shock, now affecting both
oil and gas, will keep euro-area inflation higher and more persistent than the
ECB initially expected. He said the second wave of price rises should push
inflation up and extend its duration, with inflation only expected to fall back
toward the ECB’s target from mid-2027, assuming the shock does not worsen. LANE
warned a stronger, more persistent autumn shock would put pressure on the
economy; if the shock is milder, large public spending in parts of Europe and
some corporate AI activity should help sustain growth. His baseline: if the
energy shock does not intensify, the euro-area economy should continue to grow
at a steady but moderate pace.
