European Central Bank Chief Economist Philip Lane reiterated that borrowing costs should be lifted again next month if the economic backdrop doesn’t shift significantly.
(Bloomberg) — European Central Bank Chief Economist Philip Lane reiterated that borrowing costs should be lifted again next month if the economic backdrop doesn’t shift significantly.
“If the baseline scenario underlying the March ECB’s staff macroeconomic projections persists, it will be appropriate to raise rates further,” Lane said Wednesday in a speech in Dublin.
The ECB is widely expected to increase rates again on May 4, though in contrast to previous meetings officials are wary of making firm predictions on the size of the move as they await key data on inflation and bank lending due just two days before the decision.
The reports will reveal whether underlying price pressures, stripping out things like energy and food, are still at record levels, and will shed light on the consequences for credit from recent financial-sector stress that sank lenders in the US and Switzerland.
“The current round of our bank lending survey, to be published in early May, will give us a first indication of the impact of the recent financial tensions on credit conditions,” Lane said, calling it “an important input for our May meeting.”
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