ECB Chief Economist Discusses Inflation and Interest Rates, Leaves Room for Rate Hike
The Chief Economist of the European Central Bank (ECB), Philip Lane, expressed concerns that inflation worries would extend into the next year, leaving the door open for a potential interest rate hike.
Philip Lane, the Chief Economist of the European Central Bank (ECB), stated that they will have to wait until next year to see key data that will help determine whether inflation is returning steadily to the 2% target.
Lane, in an interview with Yahoo Finance on Friday, said, "We will learn a lot this autumn, but we won't learn everything."
Regarding understanding the data they need to make progress towards the inflation target, Lane mentioned that there will be many issues to address until the new year.
Lane also noted that the ECB is more open to another interest rate hike and said, "If future data shows that more hikes are needed, of course, we will do more."
Last week, the ECB raised its deposit rate by 25 basis points to 4%. This marked the ECB's tenth consecutive interest rate hike.
While some economists expect the ECB to begin lowering interest rates from June next year, there are also expectations that the bank may keep interest rates unchanged for a longer period.
Speaking this week, the Governor of the Bank of France, Francois de Villeroy, sent a message that borrowing costs could remain at 4% for a sufficiently long time.