ECB Monitor Quarterly Report Q3 2026

The escalation of the Iran conflict in early 2026 injected significant uncertainty into the global inflation outlook. Energy-price increases and supply-chain disruptions reignited concerns about second-round inflation effects in the euro area, drawing comparisons to the post-pandemic commodity shock of 2021–22. Over the spring and early summer of 2026, these pressures were reflected in a pronounced hawkish turn in Governing Council communication, followed by a significant moderation in July partly as a consequence of the greater growth pessimism of early summer. The most recent weeks have seen disappointed hopes of falling energy prices and, at the same time, positive growth surprises for the euro area. Against this backdrop, this report assesses the prospects for the ECB’s monetary policy decisions through the lens of how Council members are communicating. Using an AI-based text classification of individual speeches, the ECB-ZEW Momentum Indicator tracks whether the tone of the Governing Council is shifting toward tighter or looser policy. This edition summarises the key findings from the most recent data update up until August 27, 2026.