ECB rate cut next week will not be ‘victory declaration’ on inflation, Lane says

Philip Lane is responsible for drafting and presenting the proposed rate decision before it is decided by the 26 members of the governing council next week. Photograph: Eric Piermont/AFP

Mr Lane highlighted that various ECB governing council members, including himself, have signalled in recent weeks that it would be appropriate to cut rates on June 6th, “barring major surprises” on the inflation front. The ECB hiked its key deposit rate from minus 0.5 per cent to 4 per cent in the 15 months to last September.

He said that while ECB staff recently published a working paper on this topic, the final evaluation “does depend on this job being concluded” to bring back inflation to target. The ECB currently sees this happening next year.

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