Rabobank Warns of Inflation Spike Amid Energy Price Surge

Rabobank strategists Bas van Geffen and Elwin de Groot have revised their inflation forecasts due to sharply higher oil and natural gas prices. They predict that these price increases will lift headline Eurozone inflation by about 0.5 percentage points in 2026 and 2027.

The analysts now expect inflation to peak around 4.4% year-on-year in early 2027, with core inflation only modestly higher. They attribute this to the direct and indirect effects of higher energy prices, as well as assumptions about supply chain pressures.

Rabobank believes that if economic activity remains resilient through the fourth quarter and energy inflation stays high, employees could demand higher pay increases to compensate for the loss of purchasing power. However, they think core inflation will be sluggish on the way down.