In an interview, European Central Bank Executive Board member Philip R. Lane assessed that a second wave of oil and gas price increases is likely to keep inflation higher for longer than previously expected. Inflation is projected to begin falling back toward the ECB’s target from mid-2027, although the outlook remains subject to substantial geopolitical and energy market uncertainty. The renewed shock has not yet materially affected prices beyond energy, but Lane expects upward pressure on food, electricity and goods, while services price pressures should remain contained. The euro area economy is expected to grow at a steady but modest pace if the energy shock does not intensify, supported by European government spending and potential gains from artificial intelligence. Lane noted that the fiscal boost will fade over time and distinguished Germany’s available fiscal space and Next Generation EU funding from broader debt sustainability concerns.
2026-09-22European Central Bank
European Central Bank Executive Board member Philip Lane sees second energy price wave prolonging inflation pressure
European Central Bank Executive Board member Philip R. Lane said a second wave of oil and gas price increases is likely to keep inflation higher for longer, with a return toward the ECB’s target beginning from mid-2027. Economic growth should remain modest if the shock does not intensify, while government spending provides temporary support.