The European Central Bank isn’t messing around on inflation. Martin Kocher, ECB Governing Council member and Governor of the Austrian National Bank, reaffirmed the central bank’s commitment to hitting its 2% inflation target, noting that secondary effects from recent energy disruptions haven’t materialized in the way some feared.
Eurozone inflation clocked in at 3.2% in May 2026, still well above the target, driven largely by Middle East-related energy disruptions that sent ripple effects through transport costs, supplier contracts, and wage negotiations across the bloc.
The rate hike heard across the eurozone
On June 15, the ECB raised its deposit rate by 25 basis points to 2.25%. It was the first increase in nearly three years.
Higher transport costs, renegotiated supplier contracts, and persistent wage pressures are expected to keep inflation elevated well into 2027. Even as headline oil prices fall post-ceasefire, those downstream effects take time to unwind.
