European Central Bank Chief Economist Philip Lane spoke over the weekend on his outlook for Bank rate hikes still to come:
- ECB could raise interest rates even into 2023
- "We do think that this is going to dampen demand, we're not going to pretend this is pain free"
(ps Just for clarity, the pain will be for you, not Lane, K?)
More from Lane:
- "Demand is now a source of inflation pressure, it was not six or nine months ago in the same way it now is."
- rates could continue to go up at each remaining meeting this year and may rise early next year also
- a recession cannot be ruled out
As head of economics at the ECB, Lane had argued for months that the drivers of inflation were the shocks caused by expensive energy prices. And that monetary policy is largely ineffective against such supply shocks. To be fair, he was not the only DM central banker making such an assessment. Lane now recognises that inflationary price growth has broadened out, and robust consumer demand is also driving prices.
