ECB Warns of Rising Inflation Volatility Amid Eurozone Economic Pressures

 The European Central Bank (ECB), on June 30, 2025, warned that inflation in the Eurozone is set to become “more volatile” due to energy price fluctuations and supply chain disruptions. 

ECB President Christine Lagarde highlighted a 2.7% inflation rate, above the 2% target, driven by a 10% surge in energy costs and a 5% euro depreciation. The Eurozone’s €14 trillion economy faces challenges from a 20% drop in Russian gas imports and China’s $2 trillion export slowdown, impacting 30% of EU manufacturing.

Lagarde’s report projects inflation could hit 3% by Q4 2025, with 60% of economists predicting tighter monetary policy. The ECB’s €500 billion bond-buying program may taper, raising borrowing costs for 10 million businesses. 

Southern Europe’s heatwave, costing €2 billion, exacerbates price pressures on food and water, with Spain’s 20% agricultural loss cited. The ECB plans a July 15 meeting to adjust its 0.5% interest rate, balancing growth and stability.