Published by Global Banking & Finance Review®
Posted on December 3, 2025
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleEuro zone inflation has surprised ECB, raising questions about future projections. Philip Lane notes potential risks and upcoming forecasts.
FRANKFURT, Dec 3 (Reuters) - Euro zone inflation has delivered some "upside surprises" recently, raising some questions about the European Central Bank's expectations for a dip early next year, the ECB's chief economist Philip Lane said on Wednesday.
Inflation in the 20 nations sharing the euro has been hovering around the ECB's 2% target for most of this year, but some measures of price growth came in higher than expected in the last couple of months.
Lane said there was still a risk that inflation - which rose sharply in 2021-22 before falling back to the ECB's 2% goal - might surpass the central bank's expectations.
"The inflation risk is not one way, we've seen some upside surprises recently," Lane told an event.
The ECB's September projections put inflation at 2.1% this year, 1.7% in 2026 and 1.9% in 2027.
Lane is due to present new forecasts, which will cover 2028 for the first time, at the ECB's next meeting on December 18, when the central bank is expected to keep its policy rate at 2%.
"We did have a clear projection, because of low energy, of inflation falling below target, especially in the opening months of next year," Lane said. "But in fact some of the data since then have moved in the opposite direction, so those are some of the mitigants."
Headline inflation edged up to 2.2% last month, slightly above expectations, as prices in the services sector accelerated.
In October, underlying inflation, which strips out more volatile prices such as food and energy, had also come in slightly higher than expected.
Delivering a speech earlier, Lane repeated his mantra that the ECB should not "respond to near-term deviations that are solidly expected to be transitory".
(Reporting by Francesco Canepa. Editing by Andrew Cawthorne and Mark Potter)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. Central banks attempt to limit inflation to keep the economy running smoothly.
Monetary policy refers to the actions taken by a country's central bank to control the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.
The European Central Bank (ECB) is the central bank for the euro and administers monetary policy within the Eurozone, aiming to maintain price stability and oversee the banking system.
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