The European Central Bank’s latest assessment highlights ongoing inflationary pressure and increasing risks to food, goods and services prices. Input‑price indices for manufacturing and services rose from 2015 to 2025, peaking in 2025, and output‑price indices followed a similar pattern, showing cost pass‑through. June 2026 data confirm persistent inflationary pressure. Energy price shocks raise inflation through cost effects and wage dynamics. Consumer inflation expectations climbed to 9.0 % for one year and 7.5 % for three years. Wage growth remains modest at 3.6 % in 2025 and 4.0 % in 2026. The ECB policy rate increased from 1 % in 2021 to 4.5 % by mid‑2026, with projections now favoring a 3–5 % range for the next year. Financial‑stability risks grow as risk‑asset valuations stay stretched and leverage rises, with equity P/E ratios high and corporate bond spreads widening. Bloomberg and ECB data show interquartile ranges above historical averages, indicating continued pressure through 2026.
© European Central Bank, 2025.
Summary derived from the ECB website (https://www.ecb.europa.eu ).
Made by AI. If you spot anything of concern write us at contact@cybach.com. We’ll promptly correct irregularities.