Second energy wave delays inflation return to mid-2027, Lane says
European Central Bank Executive Board member Philip R. Lane stated that a second wave of energy price increases will keep inflation higher for longer. In an interview published on September 22, 2026, Lane projected inflation to return toward the two percent target from mid-2027.
Second price wave extends shock
Renewed increases in oil and gas prices have extended the duration of the energy shock beyond initial ECB projections.
Lane noted that following a temporary summer recovery tied to the June 17 agreement between the United States and Iran, renewed conflict has driven a second wave of cost pressures.
The ECB projects upward pressure spreading across food, electricity, and goods in general, while pressure on services remains contained.
Lane stated that because of this second wave, inflation will remain “higher for longer, before falling back towards our target from mid-2027 onwards,” while the economy continues to grow at a steady but modest pace.
Fiscal cushions and technology buffers
Public spending and technology investments provide counterweights to energy headwinds across the euro area.
Lane highlighted that national measures, including Germany's infrastructure and defence package, alongside the Next Generation EU programme, support near-term activity without immediate debt sustainability concerns.
However, this fiscal impulse will fade over time.
Lane also noted that artificial intelligence will help raise overall living standards over the long term despite occupational disruption.
A fragile balance of hope and delay
Lane concedes that the ECB's inflation target has slipped further into the future under geopolitical pressure.
Relying on market futures and temporary fiscal spending offers little comfort if energy volatility persists.
The reassurance on growth masks how constrained policy remains while supply shocks dominate.
Source: Philip R. Lane: Interview with Le Temps
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