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Interview With ECB Chief Economist Lane

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MNI INTERVIEW: ECB To Consider Smaller December Hike - Lane

(MNI) LONDON
Frankfurt

Previous monetary tightening is already taking effect, the ECB's chief economist tells MNI.

The European Central Bank will consider reducing its pace of rate increases at its Dec 15 meeting, but it is too early to say when its hiking cycle will pause, as policymakers weigh signs that bank lending conditions are already tightening against accelerating wage inflation, chief economist Philip Lane told MNI.

After two consecutive 75-basis-point hikes taking the deposit rate to 1.5%, a significant jump in bond yields is already feeding through to banks, Lane noted in an interview, adding that the planned reduction of the ECB’s balance sheet next year will also contribute to tightening.

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The European Central Bank will consider reducing its pace of rate increases at its Dec 15 meeting, but it is too early to say when its hiking cycle will pause, as policymakers weigh signs that bank lending conditions are already tightening against accelerating wage inflation, chief economist Philip Lane told MNI.

After two consecutive 75-basis-point hikes taking the deposit rate to 1.5%, a significant jump in bond yields is already feeding through to banks, Lane noted in an interview, adding that the planned reduction of the ECB’s balance sheet next year will also contribute to tightening.

Keep reading...Show less