European central bank survey shows limited signs of second-round inflation effects

Monday 27 April 2026 - 09:01

A new survey from the European Central Bank (ECB) suggests that rising energy prices linked to geopolitical tensions are not yet translating into broader inflation pressures in the euro area economy.

According to the European Central Bank, firms across the eurozone expect inflation to increase in the short term due to higher energy costs driven by global uncertainty, including the conflict involving Iran. However, longer-term expectations remain stable, and wage growth is showing signs of moderation.

The findings come from the ECB’s Survey on the Access to Finance of Enterprises, which collected responses from more than 10,000 companies. The results indicate that while businesses anticipate higher prices in the coming year, expectations for inflation over three and five years remain unchanged.

Economists closely monitor so-called “second-round effects,” where initial price increases—such as energy shocks—lead to sustained inflation through higher wages and broader price adjustments. The latest survey suggests that such dynamics have not yet materialized in the eurozone.

Firms also reported more subdued wage expectations, which could help ease inflationary pressures in the medium term. This development supports market expectations that the ECB may keep interest rates unchanged at its upcoming policy meeting.

The central bank has been carefully assessing how external shocks, particularly energy price fluctuations, could influence long-term price stability. So far, the data indicates that inflation pressures remain contained, despite short-term volatility in energy markets.