The chief economist of the European Central Bank sees a "second wave" of price increases and expects inflation to remain higher for longer

Philip Lane, the chief economist of the European Central Bank (ECB), believes that a second wave of oil and gas price increases means that euro-area inflation will be higher for longer, before it goes back towards the 2% target after the middle of 2027.

• Lane says the euro area is experiencing a second wave of price increases for both oil and gas after the initial wave in March/April and a temporary recovery over the summer (1).
• According to the European Central Bank's Governing Council, "The conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period." (3)
• The ECB raised its three key interest rates by 0.25% on September 10, which took effect on September 16. It now projects that headline inflation will average 3% in 2026, 2.5% in 2027 and 2.1% in 2028. The 2026 figure was unchanged but 2027 and 2028 were revised up (3).
• Lane said that there hadn't yet been spillover into other prices, but that the second wave of oil and gas price increases was likely to put upward price pressure on food, electricity and other goods (1, 2).
• The ECB predicts that the euro area economy will continue to grow at a modest but steady rate if the energy shock does not become more severe.

Sources & Further Reading

1. "Interview with Le Temps." European Central Bank. September 22, 2026.
2. "ECB's Lane sees inflation returning to target from mid-2027-paper." Reuters. September 22, 2026.
3. "Monetary policy decisions." European Central Bank. September 10, 2026.