ECB to act only on major shifts in inflation outlook — Philip Lane

According to the ECB’s chief economist, Philip Lane, the central bank will only react to major shifts in the inflation outlook, dismissing small fluctuations, given that price growth in the eurozone is currently stable.

The central bank recently cut interest rates but is likely to pause next month due to uncertainty surrounding US trade policy. Lane said that the ECB will only make major adjustments to its monetary policy in exceptional cases.

The economist noted that the central bank has largely succeeded in taming high headline inflation, despite persistent excessive price growth in the services sector, which hit 3.2% in May. Still, the progress made so far suggests the main objective has been achieved.

ECB Vice President Luis de Guindos stated that the disinflationary trend in the euro area continues to hold firm despite fluctuations in oil prices. Lane, meanwhile, noted that declining energy costs affect inflation more slowly than rising ones.