ECB’s Lane: New Staff Forecasts to Include Russian Invasion of Ukraine, Latest HICP Data

2 March 2022

By David Barwick – FRANKFURT (Econostream) – The European Central Bank has seen to it that the updated staff economic projections to be released next week will take into account Russian military aggression, Executive Board member Philip Lane said Wednesday.

In remarks at the Hertie School in Berlin, Lane, who avoided current economic developments and the policy outlook, said that the ECB was keeping a close eye on the situation and would take any measures necessary for price and financial stability.

With reference to next week’s policy meeting of the Governing Council, Lane said that ‘the schedule for the March staff projections exercise has been revised in order to take into account the implications of the Russian invasion of Ukraine.’

As a result, the latest euro area inflation data would also be included in the projection exercise, he said.

Asked about the euro's recent weakness, Lane played it down. 'To me, if you take a multi-year perspective, what we're seeing is a reversal of the appreciation that happened during the first year of the pandemic', he said. 'The exchange rate is not too far away from pre-pandemic levels.'

Lane noted that the ECB’s new strategy recognised the potential for transitorily moderately above-target inflation. ‘In particular, maintaining some policy measures on a persistent basis acknowledges that a commitment to maintaining monetary policy accommodation into the future can partially substitute for sharper near-term policy easing measures’, he said.