A surge in euro zone consumer prices, propelled even higher by Russia's invasion of Ukraine, is "very close" to reaching its peak, European Central Bank vice-president Luis de Guindos said today.
Euro zone inflation soared to 7.4% in March, an all-time high for the currency club and well above the ECB's 2% target.
"My assessment is that we're very close to the peak, and that we'll start to see inflation decline in the second half of the year," de Guindos told a committee of the European Parliament.
"Nevertheless, inflation will be high even in the last quarter," de Guindos said, with the ECB currently projecting a figure of 4% for the last three months of 2022.
The bank expects inflation in the euro zone to even out at 5.1% over 2022.
The estimate reflected a "baseline" scenario, not taking into account the possibility of a stop to Russian gas supplies, which would have severe consequences for the European economy.
In such a scenario, the cost of energy would rise higher, driving inflation up to 7.1%, the ECB predicted in March.
The Frankfurt-based institution expects the shift to other power suppliers to slowly take the pressure off energy prices.
The ECB would continue to follow "second-round effects" that could push up wages, and further boost inflation, de Guindos said.
"So far we have not seen this kind of wage dynamics," the ECB vice-president said.
"Wage increases are quite prudent and fully compatible with the target of price stability," he added.
Meanwhile, consumer prices in Germany rose at their fastest pace in four decades, new data showed, as Russia's invasion of Ukraine spurs energy prices to new heights.
Inflation climbed to 7.4% in April, up from 7.3% in March, according to the federal statistics agency, Destatis.
The figure was last higher for West Germany in the autumn of 1981.
