ING warns Belgium’s inflation shock could spread across Europe

Belgium’s sudden inflation spike in April, driven by an energy shock spilling into wider consumer prices, has prompted ING Economics to warn of a dangerous pattern that could spread across Europe. 

ING’s Senior Economist Philippe Ledent cautioned that the surge, which lifted headline inflation to 4% from 1.65% in March, risks reigniting the kind of broad‑based price pressures that unsettled the eurozone in 2022.

ING Economics cautioned that Belgium’s inflation shock is not an isolated event, but a potential harbinger of renewed price pressures across the eurozone.

Energy shock and inflation surge

Belgium’s inflation jumped from 1.65% in March to 4% in April, according to ING Economics. 

The rise was triggered by a violent energy shock, with oil prices in euro terms climbing more than 10% year‑on‑year — the sharpest increase in two decades.

Energy inflation swung from –8% in January to +12% in April, underscoring the severity of the shock.  

Philippe Ledent, Senior Economist for Belgium and Luxembourg at ING, said the concern is no longer limited to energy. “It is becoming harder to argue that this is just energy,” he noted, pointing to signs of spillover across consumer prices.

Spillover across consumer prices

Belgium’s consumer price index tracks 215 categories of goods and services.

ING’s analysis shows that the share of items with inflation above 2% rose from 39% early this year to 51% in April. 

On a yearly basis, the share of items running above 4% inflation increased from 21% to 27%.  

Most striking was the share of items whose inflation rose compared with the previous month.

Historically averaging 43%, this figure fell to 27% early in 2026, signaling normalisation. 

But in April it surged to 62%, a level rarely seen outside the 2021–2022 inflation wave.

Ledent warned that this metric had previously led to headline inflation, suggesting risks of a broader surge.

Warning for Europe

ING Economics stressed that if Belgium’s inflation pattern persists and spreads across the euro area, the European Central Bank (ECB) faces a dilemma similar to 2022.

Then, what appeared to be a temporary energy spike became the strongest inflation surge since the 1970s.  

The report highlights the risk of stagflation, where higher rates fail to curb energy‑driven inflation but still squeeze demand.

ING warned that central banks must track whether the shock remains contained or broadens into a wider inflation wave.

Competitiveness at stake

Belgium’s automatic wage indexation system amplifies inflation shocks.

Wages and many benefits are directly linked to prices, meaning April’s surge will trigger nominal wage increases not anticipated at the start of the year. 

This risks eroding competitiveness, as neighboring countries adjust more slowly.  

The Belgian government has proposed capping indexation for higher incomes and pensions, but unions and employers have pushed for smoothing the timing of adjustments instead. 

ING Economics noted that the debate has intensified, with businesses warning of abrupt competitiveness shocks and unions resisting cuts to purchasing power.

Broader European implications

ING Economics emphasised that Belgium’s experience is a warning sign for Europe.

If energy shocks trigger automatic wage increases and broader inflation across categories, the eurozone could face renewed inflationary pressures just as policymakers believed the worst was behind them.  

Ledent concluded that the timing of this shock is particularly damaging. 

Belgium’s April inflation surge, driven by energy but now spilling into broader categories, is a stark reminder of Europe’s vulnerability to renewed price shocks. 

ING Economics and Philippe Ledent warn that, unless contained, the pattern could spread across the eurozone, forcing the ECB into another difficult policy battle.  

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