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MNI BRIEF: Signs ECB Policy Is Working In Inflation Fight-Lane

(MNI) London

There are growing signs that the European Central Bank's monetary policy is starting to work, but the latest data still suggests a 50bps hike is needed in March, chief economist Philip Lane said in an interview published Tuesday, although adding that the central bank would continue tightening until it was confident inflation was heading back to the 2% target.

Lane told Reuters that the ECB would need to consider three things ahead of ending rate hikes: lower inflation projections through its horizon, progress in lowering actual underlying inflation and the conclusion that monetary policy is working.

He also noted the emergence of on balance disinflationary supplyside price pressures, including from the reopening of China, which would eventually feed through into even core inflation.

MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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