Lane, Chief Economist of the European Central Bank: Moderate policy response is the appropriate choice to control inflation

智通财经2026/10/05 08:36

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(1) The chief economist of the European Central Bank, Lane, stated that as the ECB assesses the impact of a second wave of energy shocks on the economy, adopting a moderate policy response is the appropriate choice to control inflation. (2) She noted that after the outbreak of the Iran conflict, oil and gas prices surged for the first time, and the eurozone economy demonstrated stronger-than-expected resilience. However, this new round of energy price pressure not only carries upside risks for inflation but could also dampen economic growth, and therefore requires close monitoring. (3) She added that in addition to continuously assessing the transmission process of the first round of shocks, it is necessary to determine whether the second round will have a stronger impact on economic activity and inflation dynamics than the first. Our monetary policy remains on a “middle path,” and a moderate policy response will help keep inflation at a reasonable level. (4) The European Central Bank has raised interest rates twice to ensure that medium-term inflation falls back to the 2% target. Although policymakers, including Lane, said that the recent increase in energy costs has not yet affected inflation expectations, they remain vigilant, and both economists and financial markets expect the ECB to further tighten policy.

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⑴ European Central Bank Chief Economist Lane stated that, while assessing the impact of the second round of energy shocks on the economy, a moderate policy response by the European Central Bank is the appropriate choice to control inflation.⑵ She indicated that, following the outbreak of the Iran conflict and the initial surge in oil and gas prices, the eurozone economy demonstrated resilience beyond expectations. However, the new round of energy price pressures brings both upward risks for inflation and the potential to drag down economic growth, thus requiring close attention.⑶ She emphasized that, in addition to continuously evaluating the transmission process of the first round of shocks, it is also necessary to judge whether the second round will affect economic activity and inflation dynamics more intensely than the first. Our monetary policy remains on a "middle path," and taking moderate policy responses helps keep inflation at a reasonable level.⑷ The European Central Bank has raised interest rates twice to ensure that medium-term inflation falls back to the 2% target level. Although policymakers, including Lane, say that the current increase in energy costs has not yet affected inflation expectations, they remain vigilant; economists and financial markets expect the European Central Bank to further tighten policy.

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