ECB remarks in its latest economic bulletin
Adding that the inflation upswing is largely a combination of three factors:
First, energy prices - especially for oil, gas and electricity - have risen sharply. In September, energy inflation accounted for about half of overall inflation. Second, prices are also going up because recovering demand related to the reopening of the economy is outpacing supply. These dynamics are especially visible in the prices of consumer services, as well as the prices of goods affected most strongly by supply shortages. And finally, base effects related to the end of the VAT cut in Germany are still contributing to higher inflation. The influence of all three factors is expected to ease in the course of 2022 or to fall out of the year-on-year inflation calculation.
However, they do acknowledge that most indicators of underlying inflation have continued to increase. Although, wage pressures continued to remain subdued overall.
The full economic bulletin can be found here.
