Poll Says Eurozone Inflation Seen Rising in 2026
The latest projections show inflation in the euro area averaging 2.7% in 2026, a significant upward revision from an earlier estimate of 1.8%. Forecasts then anticipate a slowdown in price growth to 2.1% in 2027 and a return to the 2% target in 2028.
The survey also indicated slightly weaker expectations for economic growth, with analysts citing rising uncertainty linked to geopolitical tensions in the Middle East and their impact on energy costs across Europe.
A separate corporate survey conducted by the European Central Bank suggested that the transmission of higher energy prices—partly driven by the ongoing conflict involving Iran—may occur more gradually than in previous crises. However, it warned that prolonged instability could still intensify inflationary pressures.
The ECB recently kept interest rates unchanged but signaled that future increases could be considered if inflation risks remain elevated.
Some policymakers have expressed differing views on the outlook. Germany’s central bank chief Joachim Nagel suggested that interest rates may need to rise unless inflation and growth conditions improve significantly. In contrast, Greece’s central bank governor Yannis Stournaras warned that recession risks remain “real,” while Finland’s Olli Rehn noted that there are currently “no obvious signs” of entrenched war-driven inflation through wage and price spirals.
According to reports, the ECB is now closely monitoring potential second-round effects of inflation, including wage growth, pricing behavior among businesses, and shifts in inflation expectations among consumers and firms.
The corporate survey also noted that recent increases in oil prices have been quickly reflected in the cost of energy-dependent goods and services. However, it added that many large companies are now better protected against energy price volatility compared with the 2022 energy shock, which may help reduce the overall economic impact.
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