EZB wird reagieren, wenn die Inflation über den Erwartungen bleibt: Lane

FRÁNCFORT, Jan 25 (Reuters) – The European Central Bank will tighten policy if it sees inflation remaining above its target, but this scenario seems less likely for now, Philip Lane, the bank’s chief economist, told Lithuanian newspaper Verslo žinios.

Inflation reached 5% last month, the highest on record in the euro zone. However, the ECB believes it will fall back below the 2% target in the fourth quarter, although some policymakers believe this is an overly optimistic scenario.

„I think we are always clear that we are guided by our intentions to achieve a 2% inflation rate over the medium term,“ he said. „So we will adjust all our policies – whether it’s asset purchases, the targeted lending program, our interest rates – to achieve that target.“

In that scenario, the first decision would be to end asset purchases and only after that would the ECB consider raising rates, Lane added.

„It seems less likely to me to think about a scenario in which inflation is persistently and significantly above 2%, which would require serious tightening,“ he said, adding that wage growth remained of little concern.

Lane also said the ECB is increasingly relaxed about the economic impact of the omicron variant of COVID-19.

„It’s not turning out to be a factor that’s going to influence activity levels for the year, but rather activity levels for a few weeks (…) I think the concern about omicron is less than we had in December,“ he said.

(Reporting by Balazs Koranyi; editing by Alex Richardson and Kevin Liffey)