Economy September 16, 2026 11:12 AM

ECB Governing Council Member Says Inflation Not Spreading as Rapidly as in 2022, But Risks Remain

Portuguese central bank chief flags gas price spike and AI-driven growth as key developments under close watch after recent ECB rate rise

By Sofia Navarro
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Álvaro Santos Pereira, head of Portugal's central bank and a member of the ECB's Governing Council, told an event in London that euro zone inflation is not broadening at the same speed seen in 2022. He said policymakers are watching recent rises in natural gas prices and the economic effects of the AI boom, and noted that the ECB raised interest rates last week for the second time this year while markets expect at least three more hikes in the coming 12 months.

ECB Governing Council Member Says Inflation Not Spreading as Rapidly as in 2022, But Risks Remain
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Key Points

  • Euro zone inflation is not broadening as fast as it did in 2022, according to ECB Governing Council member Álvaro Santos Pereira.
  • Policymakers are watching a recent surge in natural gas prices and rapid developments in artificial intelligence for their potential impact on growth and inflation.
  • The ECB raised interest rates last week for the second time this year, and markets expect at least three more rate hikes over the next 12 months - with implications for financial markets and interest-sensitive sectors.

Euro zone inflation is not extending across the economy at the same pace observed in 2022, but authorities remain vigilant, Portuguese central bank chief Álvaro Santos Pereira said at a public event in London.

Pereira, who sits on the European Central Bank's Governing Council, addressed attendees at a European Economics and Financial Centre gathering held at the Portuguese embassy. He qualified the current picture of inflation, saying that although broadening is not occurring as quickly as during the previous surge, the risk has not vanished.

"It doesn’t mean that it could not happen... It’s important for us to notice, and we monitor very closely exactly this in the next few months to see whether this is broadening," Pereira said.

The remarks come after the ECB raised policy rates last week - marking the second increase this year. Financial markets are currently pricing in at least three more rate hikes over the next 12 months, reflecting expectations that tightening may continue.

Pereira singled out the recent spike in natural gas prices as a development that warrants particular attention from policymakers. He also highlighted the rapid expansion of artificial intelligence and the consequent implications for global growth and inflation as additional challenges for central bankers.

"There’s a lot of risks that certainly have risen in the last few months," he added, indicating a range of uncertainties now on the radar of the ECB's decision-makers.

His comments underscore an approach of careful monitoring: inflation appears less prone to broad and rapid diffusion than in 2022, but elevated energy costs and structural changes tied to new technologies could alter that trajectory. For now, the ECB has chosen a tightening path, and markets are pricing further action in the year ahead.


Contextual note: The observations summarized here reflect statements made by Álvaro Santos Pereira at the referenced event. No additional developments beyond those comments are included.

Risks

  • Inflation could still broaden in coming months if the monitored developments, such as higher energy costs, feed through to a wider set of prices - impacting consumer-facing sectors and real assets.
  • Rising natural gas prices present an upside risk to inflation that may force more persistent policy tightening - affecting bond markets, borrowing costs and property financing.
  • The AI-driven acceleration in growth could have complex effects on inflation dynamics, creating uncertainty for central bank policy and sectors exposed to rapid technology-driven demand changes.

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