A second surge in oil and gas prices will make eurozone inflation higher and more persistent, European Central Bank Chief Economist Philip Lane said, with inflation likely to move toward the ECB's 2% target around mid-2027. Lane said there has so far been no clear spillover from energy prices into other categories, but further increases could raise food, electricity and broader goods costs later this year, while services inflation remains relatively contained. Retail fuel prices in the European Union have reached record highs, with gasoline up 29% since February and diesel as much as 40% on a weighted-average basis. Eurozone energy inflation rose to 14.3% in August. The ECB expects diesel prices to peak by October, though tightening supply and the possibility of a U.S. ban on fuel exports could make that outlook too optimistic. Existing ECB projections put average inflation at 3% this year and 2.5% next year, while the central bank has implemented a second rate increase and is discussing further tightening. A stronger energy shock would weigh on growth, while public investment and artificial-intelligence spending could support moderate expansion if prices stabilize.