In the Richard Cantillon Lecture at the DEW Economic Policy Conference, European Central Bank Executive Board member Philip R. Lane presented the September 2026 ECB staff outlook for the euro area. The baseline projects annual inflation of 3 percent in 2026, 2.5 percent in 2027 and 2.1 percent in 2028, while real gross domestic product growth is forecast at 0.9 percent, 1.4 percent and 1.5 percent, respectively. Compared with the June projections, the inflation forecast is unchanged for 2026 and higher by 0.2 percentage points for 2027 and 0.1 percentage points for 2028. Growth is revised up by 0.1 percentage points in both 2026 and 2027. Energy prices and the Middle East conflict remain major sources of uncertainty. Under the severe conflict scenario, inflation would reach 5.4 percent in 2027 and growth would slow to 0.4 percent, compared with baseline estimates of 2.5 percent and 1.4 percent. A severe scenario that also includes jet fuel shortages would raise 2027 inflation to 5.6 percent and reduce growth to 0.3 percent. The baseline nevertheless points to continued expansion, easing inflation over the projection horizon and an unemployment rate declining from 6.2 percent in 2026 to 5.9 percent in 2028.
2026-09-11European Central Bank
European Central Bank's Philip Lane outlines euro area outlook, with inflation projected at 3 percent in 2026 and growth at 0.9 percent
European Central Bank Executive Board member Philip R. Lane presented projections showing euro area inflation at 3 percent in 2026 before easing to 2.1 percent in 2028. Real GDP growth is forecast at 0.9 percent in 2026, rising to 1.5 percent in 2028. A severe Middle East conflict scenario would lift 2027 inflation to 5.4 percent and cut growth to 0.4 percent.