Available evidence on price and wage-setting behaviour in the euro area suggests some cause for concern in two respects: •  First, the indirect impacts on inflation have been strong, given both the scale of the rise in energy and food prices and the fact that these commodities are an extensive input into the production of other goods and services.
Strong producer price inflation was not confined to the direct energy and food price components of producer prices. BIS Review 130/2008  1  Indirect effects have also been visible at the retail level, most notably in areas with a strong link to energy and food prices, such as the transport and restaurant and café components.