Have the article read by OpenAI (Beta). Please note that AI translations may take some time to process.Frankfurt – The chief economist at the European Central Bank (ECB), Philip Lane, spoke out in favour of further interest rate cuts to support the economy in an interview published on Monday.
“We are not committing ourselves in advance to an exact pace of reduction, but we will have to cut our interest rates gradually,” Lane said in an interview with the French financial newspaper Les Echos.
According to Lane, monetary policy should not remain restrictive for too long. “Otherwise, the economy will not grow sufficiently,” he said.
Lane said he expects that inflation in the eurozone to keep moving towards the ECB’s target of an annual rate under 2%. “A large part of the final stage” in bringing inflation back to the target will be reached next year, he said.
A further easing of monetary policy is expected at the ECB’s next interest rate meeting in mid-December. Most recently, the central bank continued to cut interest rates in October and reduced the key interest rate by 0.25 percentage points. The relevant deposit rate currently stands at 3.25%.
Recent economic data surprisingly week
Recent economic data from the eurozone was surprisingly weak, which bolstered calls for further rate cuts in hopes of boosting economic growth.
There are risks that US President-elect Donald Trump might impose stiff tariffs and other trade protectionist policies which could harm European countries, which do extensive trade with the United States.
Lane said the extent of the problem facing the eurozone will depend on how widespread protectionist policies are and how quickly those policies are implemented. There is a wide range of scenarios, he said.
“If tariffs are raised quickly and across the board, European companies will have little time to prepare and the risk of a major disruption is very high,” Lane warned. (November 25)
The editorial responsibility for the publication lies with dpa.