ECB’s Escriva: Oil and Gas Price Shock Larger Than Expected

The distinction Escriva draws matters more than the shock itself: energy prices are squeezing the euro-area economy, but the absence of second-round effects is what keeps this framed as a supply-side problem rather than an inflation regime change. That framing carries weight for rate expectations, since it separates a temporary input-cost hit from the wage-and-price spiral policymakers are actually trying to prevent. Whether that second-round pass-through stays absent is the open question, and it is the signal to watch in coming wage and underlying inflation data.