FRANKFURT (Reuters) – The European Central Bank will need to raise interest rates again in May if inflation develops along the path seen in the bank’s March economic projections, ECB chief economist Philip Lane told the Cyprus News Agency.
The ECB has raised rates by a combined 350 basis points since July but did not provide specific guidance for its May 4 meeting, arguing that turbulence in the financial sector required extra caution.
“If the baseline we developed before the banking stress holds up, it will be appropriate to have a further increase in May,” Lane was quoted on Thursday as saying.
“However, we need to be data-dependent about the assessment of whether that baseline still holds true at the time of our May meeting.”
Markets have fully priced in a 25 basis point increase in the 3% deposit rate on May 4 and see another 25 basis point move by mid-year, a downgrade from a month ago, when twice as many…
Read More