ECB Warns Energy Shock Could Keep Inflation Hot

European Central Bank Vice President Boris Vujcic warned that the ongoing energy shock could keep inflation hot, despite the ECB's efforts to tighten monetary policy. The bank has started a tightening cycle and sees a 'risk of higher for longer energy prices', according to Vujcic.

The impact of high energy prices will be particularly felt in diesel fuel, which is expected to remain expensive for an extended period. This development could feed into inflation, making it more challenging for the ECB to achieve its price stability target of around 2%.