ECB Executive Board member Philip Lane said the euro area economy should keep growing at a steady, moderate pace if the energy shock does not intensify. He also said a second wave of energy price increases will push inflation higher before it eases toward target from mid-2027.
Lane ties growth to the energy shock
European Central Bank Executive Board member Philip Lane said the euro area economy should continue to grow at a steady but moderate pace, provided the current energy shock does not intensify, according to Reuters. The remark came in an interview with a Swiss newspaper.
Lane's conditional framing keeps the growth outlook tied directly to how oil and gas prices move from here rather than committing the ECB to a fixed path. The comments extend a running theme in his public remarks through 2026, in which he has repeatedly described the region's energy-driven price pressure as manageable so long as it stays contained rather than broadening into a larger shock.
A second wave of energy prices, then a delayed decline
Lane also said a second wave of energy price increases will push inflation higher before it declines toward the ECB's target from the middle of 2027 onward, according to Reuters. That timeline points to near-term price pressure persisting for some time yet, with any meaningful easing pushed out beyond the next year.
The remarks come as the ECB weighs how much of the current energy pressure reflects a temporary disruption against a more persistent shift in costs. Lane has distinguished in earlier comments this year between shocks the central bank can look through and those large enough to demand a more forceful policy response, keeping the door open to a shift in tone should the energy shock worsen.
For now, Lane's timeline leaves the ECB expecting elevated inflation to persist before any meaningful decline arrives after mid-2027.
Source: Investinglive (Reuters)
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