Energy costs drive inflation in euro area as supply shocks dominate demand

Energy costs drive inflation in euro area as supply shocks dominate demand

The recent surge in euro area inflation is predominantly driven by energy supply shocks rather than buoyant consumer demand, according to a European Central Bank (ECB) study. Writing in an official ECB blog post, analysts Niccolò Battistini and Giovanni Trebbi examined whether commercial enterprises attribute rising prices to strong demand pressures or severe supply constraints […]