MNI BRIEF: ECB Needs Time To Calibrate Restriction - Lane

The European Central Bank will need time to calibrate “the balance of restriction we need” as it loosens policy, Executive Board member Phillip Lane said on Wednesday, adding that the ECB has entered the "last kilometre" of its fight to contain inflation.

Responding to an audience question at the ECB Watchers event in Frankfurt, Lane said there will be more than one interest rate cut on the way down and that policymakers will need to be very careful in judging the optimal level of interest rates.

But the ECB has now made some progress in the so-called “last mile” towards its inflation target, according to Lane, who said it has now entered on the “last kilometre.” The range of probable inflation outcomes around the ECB’s central inflation forecast also narrows in nominal terms as the headline figure falls closer to the 2% target, he noted.