ECB's Lane Says Energy Prices to Keep Eurozone Inflation Above Target Into 2027

Eurozone inflation will likely stay elevated until mid-2027 as a second wave of surging oil and gas prices feeds through to food, electricity and goods, European Central Bank chief economist Philip Lane said. He expects inflation to approach the 2% target starting in mid-2027. Lane told a Swiss daily that no broad spillover from energy to other prices has occurred since February, but warned the current energy surge should push up food, electricity and goods prices, while services pressures remain contained. EU retail fuel prices are at record highs, with gasoline up 29% and diesel up 40% on a weighted average since February. Eurozone energy inflation reached 14.3% in August. The ECB expects diesel to peak by October, though tightening supply and a possible U.S. export ban could make that forecast overly optimistic.