ECB officials signal persistent inflation risks as energy price spikes threaten to broaden into food and electricity sectors, with diesel costs hitting record highs.
Oil prices are described as soaring and driving higher inflation, with diesel expected to peak only by October.
Brent crude is implicitly covered by the reference to soaring oil prices affecting eurozone inflation and fuel costs.
Natural gas prices are explicitly cited as part of the energy price surge keeping inflation elevated.
ECB Chief Economist Philip Lane warns that soaring energy costs will keep eurozone inflation above the 2% target until mid-2027. While service costs remain contained, the central bank expects a spillover effect into food and electricity prices as diesel costs climb 40% since February.
The ECB attributes persistent inflation to a second wave of energy price increases, specifically in oil and natural gas, which are expected to pressure food and electricity costs.