FRANKFURT (Reuters) – The European Central Bank will need some time, possibly until next spring, before it can be confident that inflation is returning to its 2% target, ECB chief economist Philip Lane told a Dutch newspaper.
The ECB has raised rates at each of its past ten meetings to curb runaway price growth but signalled a pause for October and markets expect its next move to be a cut, not a hike, sometime around mid-2024.
“I personally will need more information about the wage settlements for 2024, and we will have to wait until spring next year before many countries release that information,” Het Financieele Dagblad quoted Lane as saying on Monday.
“So it’s going to be some time before we can have a high degree of confidence that inflation is on its way back to 2%.”
Lane also kept the door open to further rate hikes, arguing that if there are further large or persistent inflation shocks, the ECB needs to be open to doing more.
“Only when we are sufficiently confident of reaching that target, we can normalise policy,” Lane said. “But this is quite some distance from where we are now. ”
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