Euro zone inflation is likely to remain above the European Central Bank's 2% target for the foreseeable future, even if a ceasefire in the Middle East is achieved, ECB chief economist Philip Lane said on Monday.
Lane's comments underscore the persistent structural pressures facing the euro area's price stability mandate.
2% year-over-year in May, marking the sharpest annual increase in more than a year and surpassing market expectations.
The central bank's top economist suggested that the resolution of geopolitical conflicts, while beneficial, would not be sufficient to rapidly normalize inflation dynamics across the bloc.
The warning comes as euro zone consumer prices accelerated to 3.2% year-over-year in May, marking the sharpest annual increase in more than a year and surpassing market expectations.
The recent uptick was driven largely by a rebound in energy costs linked to regional instability.
Markets are digesting the implication that the ECB's pause on interest rates may need to extend longer than some investors had hoped.