The ECB’s inflation outlook has become less certain as persistently elevated energy costs risk feeding into broader price pressures, reports said.
Christine Lagarde warned that persistently high energy prices increase the risk of second-round inflation effects, a dynamic in which an initial price shock spreads into wages and broader consumer prices. The reports said the warning makes the European Central Bank’s disinflation path less certain, underscoring renewed concern that energy-driven cost pressures could complicate the return of inflation to target.