ECB’s Lane: Impact of Trade Tensions Uncertain on Inflation, Negative for Growth

3 January 2025

ECB’s Lane: Impact of Trade Tensions Uncertain on Inflation, Negative for Growth
Philip Lane, chief economist of the European Central Bank, at the 5th Joint BoC - ECB - NY Fed Conference in Frankfurt on October 2, 2024. Photo by Bernd Roselieb for ECB under CC BY-NC-ND 2.0.

By Marta Vilar – MADRID (Econostream) – European Central Bank Chief Economist Philip Lane said on Friday that the effect of trade tensions on inflation was uncertain but on economic growth would be negative.

Speaking at the ASSA annual meeting in San Francisco, Lane, according to the slides made available by the ECB, said that there was an ‘uncertain impact of trade frictions on inflation’, while there was ‘downside risk to output.’

In understanding geopolitical fragmentation Lane mentioned four insights for central banks: look beyond aggregate trade data, conduct business surveys regularly, have a better understanding of EU interpendencies and find a wider set of analytical tools.

‘Geopolitical fragmentation [is] a major topic for central banks’, Lane said according to the slides provided.

 

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