Eurozone officials warn high energy prices may persist to 2027

European officials warned on Friday that elevated oil and gas prices are expected to persist until at least the end of 2027, increasing financial pressure on households and businesses across the continent. The warnings were issued following a meeting of eurozone finance ministers in Nicosia, Cyprus.

EU Economy Commissioner Valdis Dombrovskis stated that higher energy costs are now forecast to drive inflation to 3.1% this year and 2.4% in 2027, a significant increase from an earlier projection of 1.9% for this year. He cautioned that the inflationary impact is spreading beyond fuel prices. Officials linked the sustained price pressures primarily to instability in the Middle East affecting energy markets.

European Central Bank President Christine Lagarde warned that the economic effects would endure even if the regional conflict ended immediately, noting that supply disruptions can leave lasting pricing distortions. She stated that price levels are likely to remain structurally higher after the crisis subsides. The ECB remains focused on maintaining price stability near its 2% target and will take all necessary measures, Lagarde said, while emphasizing a data-dependent,...