ECB Lifts Growth and Inflation Projections Amid War-Induced Energy Shock

The European Central Bank (ECB) has raised its growth and inflation projections, indicating that it expects the energy shock caused by the war to dissipate slowly.

Inflation soared past 3% this summer and is likely to stay high for some time, raising concerns about a wage-price spiral. The ECB's new projections show that inflation will average 2.5% next year, up from 2.3% in June.

Despite the risks, the economy appears more resilient than expected, with consumption, investment, and industrial output holding up well.