De Nederlandsche Bank President Olaf Sleijpen said the Iran shock is lasting longer than expected, while second-round effects were not yet visible, FXStreet and Newsquawk reported Tuesday, as annual energy inflation reached 18.9% in September.
Sleijpen, also a member of the European Central Bank’s Governing Council, called the shock “more persistent than earlier thought.” He said, “We don’t really see second-round effects yet.”
FXStreet separately reported that Sleijpen said energy risks could add to inflation pressure and that monetary tightening was slowing the European Union economy.
The ECB uses “second-round effects” to describe the spread of an energy shock through wage negotiations, companies’ pricing choices and expectations about future inflation. If costs move through those channels, price pressure can extend beyond energy and become more persistent.
At its Oct. 29 meeting, the ECB kept its deposit rate at 2.50%, its main refinancing rate at 2.65% and its marginal lending rate at 2.90%. ECB President Christine Lagarde said wages had not shown a material response to the energy shock “at this stage.”
Eurostat reported annual euro-area inflation of 3.8% in September, up from 3.2% in August. Annual energy inflation was 18.9%, compared with 14.3% in August. These figures compare each month with the same month a year earlier.
In its fourth-quarter Survey of Professional Forecasters, the ECB reported expected second-round contributions of 0.1 percentage point in 2026 and 2027, and 0.0 percentage point in 2028. The survey estimates future contributions to inflation; they do not measure whether such pressure is present in current data.
The ECB’s September review described a broader mix behind inflation in 2021-22, including supply disruptions, stronger demand and public support. It attributed most of the increase through May 2026 to energy supply shocks connected with the Middle East conflict and the Strait of Hormuz closure.
EconoTimes previously covered the ECB’s warning that a larger or longer energy shock could raise inflation and weigh on growth. Eurostat’s October euro-area inflation flash estimate was scheduled for Wednesday, Nov. 4.
