Boris Vujčić: Interview with Reuters

Boris Vujčić, a spokesperson for the European Central Bank (ECB), discussed recent developments in energy prices and their impact on inflation and growth during an interview with Reuters. He noted that energy prices have been increasing and that this has affected the ECB's projections, particularly in terms of inflation expectations and the rate path. Vujčić emphasized that the ECB does not provide forward guidance and that they base their decisions on a range of data and criteria, not solely on energy prices.

The spokesperson also pointed out that gas prices, while important, have a more persistent and long-lasting impact on inflation compared to oil prices. Europe has been adapting to the lower gas storage levels by increasing renewable energy capacity and improving energy efficiency. However, the outlook for food inflation remains uncertain, with the ECB expecting it to increase gradually, peaking at 3.4% in the third quarter of 2027. This projection takes into account the lagged pass-through effect from recent droughts in Europe.

Vujčić highlighted the resilience of the euro area economy in the face of higher interest rates and energy costs. He attributed this resilience to a combination of factors, including exports and private consumption, which have been stronger than initially anticipated. The ECB has been implementing a gradual tightening approach so far, monitoring the economic transmission mechanisms closely.

While the rise in long-term sovereign bond yields poses some risks to financial stability, Vujčić stated that it is not a major concern at this time.