In a lecture at the University of Lausanne, Philip R. Lane, member of the European Central Bank’s Executive Board, reviewed the September 2026 staff outlook for the euro area. Headline Harmonised Index of Consumer Prices inflation is projected at 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028, while real GDP growth is forecast at 0.9%, 1.4% and 1.5%, respectively. Compared with the June projections, the inflation forecast is unchanged for 2026 and raised by 0.2 percentage points for 2027 and 0.1 percentage points for 2028. Growth is raised by 0.1 percentage points for 2026 and 0.2 percentage points for 2027, with no change for 2028. The 2026 inflation outlook reflects projected energy inflation of 9.3%, which is expected to slow to 1.0% in 2027 and turn negative in 2028. Inflation excluding energy and food is forecast at 2.5% in 2026, 2.6% in 2027 and 2.3% in 2028. Model simulations presented in the lecture indicate that higher expected short and long term interest rates and broader financial tightening since late 2025 would reduce cumulative GDP growth and inflation over 2026-2028.
2026-09-24European Central Bank
European Central Bank’s Philip R Lane reviews outlook for easing euro area inflation and firmer growth amid tighter financial conditions
European Central Bank Executive Board member Philip R. Lane reviewed projections showing euro area inflation declining from 3.0% in 2026 to 2.1% in 2028, while GDP growth rises from 0.9% to 1.5%. The 2026 inflation increase is driven partly by energy, while tighter financial conditions are expected to weigh on both growth and inflation through 2028.