(Bloomberg) — The European Central Bank might hold borrowing costs at a high level for some time once they reach their peak, according to Chief Economist Philip Lane.
(Bloomberg) — The European Central Bank might hold borrowing costs at a high level for some time once they reach their peak, according to Chief Economist Philip Lane.
“It could be quite a long-lasting period, a fair number of quarters,” Lane told Reuters in comments published Tuesday.
Investors are weighing the path for ECB borrowing costs beyond next month’s anticipated half-point hike, the case for which is still solid, according to Lane. Inflation data due Thursday will help shape those expectations, with the euro zone’s headline number set to slow again as the core measure remains stuck at a record.
“We’re all signed up to the criterion that sufficient progress in underlying inflation is important,” Lane said.
Still, “there’s significant evidence that monetary policy is kicking in,” he was cited as saying. “For energy, food and goods, there’s a lot of forward-looking indicators saying that inflation pressures in all of those categories should come down quite a bit.”
“Actual goods retail prices are still very strong, but the intermediate stage has been a good predictor of price pressures,” Lane said. “The fact that these are turning around, including through the easing of bottlenecks and global factors, suggest that there will be significant reductions in inflation rates for energy, food and goods.”
- For Reuters interview, click here
(Updates with inflation quotes starting in fourth paragraph)
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