ECB Cautious on Wage Pressures Amid Energy-Driven Inflation

The European Central Bank (ECB) is downplaying concerns that rapid price growth could become embedded in the economy, according to its chief economist Philip Lane.

Lane noted that despite inflation shooting past 3% last month and some economists predicting it will hit 4% by year's end due to rising fuel and gas prices, he doesn't see significant wage pressures as a response. The surge in energy prices has pushed up market bets for ECB rate hikes.

Lane acknowledged that energy prices are now seen tracking the ECB's adverse scenario through the middle of next year, creating a potential risk, but noted low natural gas stocks could also pose a problem, with storage levels at 70% compared to their historic average of 86%