ECB’s Lane: Inflation to Return to Target in Timely Manner; ‘We’re Not Bystanders’
26 May 2023
By David Barwick – DUBROVNIK, Croatia (Econostream) – European Central Bank Executive Board member Philip Lane on Friday said that the ECB was acting to ensure the restoration of price stability in a timely manner, and downplayed the inflationary threat from wage developments.
In remarks at the Dubrovnik Economic Conference of the Croatian National Bank, Lane said, ‘Inflation will return to target in a timely manner.’
‘There is a lot of uncertainty, and in particular the uncertainty … about the intrinsic uncertainty of inflation’, he said.
Following the shocks that occurred, inflation ‘doesn’t burn out overnight’, he said. ‘…the adjustment does take time. But it should return to target’, also because the ECB does not face the policy constraints that it would if it were dealing with too-low inflation.
‘We’re not bystanders, we do have a policy instrument to inject anti-inflationary pressures’, he said.
Lane appeared relatively sanguine about wage developments, saying that ‘increases should not pass one-for-one into higher prices this year’ and that ‘[o]n average, wages are rising in a very moderate way.’
The ‘spectacular reversal of energy prices’ will ultimately affect inflation, he assured, but the extent and speed of the effect were uncertain.