ECB’s Lane backs measured response to energy-driven inflation

At an ECB monetary-policy conference in Frankfurt on 5 October, Executive Board member Philip R. Lane said a measured response was appropriate as higher energy prices pushed up inflation. He described the rise in the policy rate from 2.00% to 2.50% across June and September as prudent, but said future decisions would depend on the data at each meeting. His speech set out his personal views, not a new rate decision or the collective position of the ECB Governing Council. [1]

Lane put September headline inflation at 3.8%, including energy inflation of 18.8%, while non-energy inflation stood at 2.3%. He said the energy shock had not yet produced a sustained rise in underlying medium-term inflation. But he cited ECB projections showing non-energy inflation rising from 2.3% in 2026 to an average of 2.6% in 2027 as higher energy costs spread to other sectors, before returning to 2.3% in 2028. [1]