This distortion is largely time-shifted: consumers with fixed energy contracts will also eventually face higher gas prices. Where do we see inflation going? The exceptional economic circumstances are creating great uncertainty about the future path of inflation. ECB projections call for euro area inflation to remain high in 2023, only approaching levels near 2% in 2024.
Related upside risks are linked to Russian gas supplies and European demand for gas both this winter and in the winter of 2023-24. The profound influence of energy prices means that the central bank has difficulty controlling current inflation. Wage growth along with the increase in the minimum wage also pose an inflationary risk.