ECB Chief Economist Philip Lane said in a conference over the weekend, monetary tightening is “going to dampen demand”, and “we’re not going to pretend this is pain free”.
“Demand is now a source of inflation pressure, it was not six or nine months ago in the same way it now is,” he added.
While rate hikes could continue at each remaining meeting of the year, and extend to early next year, Lane said ECB is open mind on where to stop with a meeting-by-meeting approach.
On the economy, Lane said separately in an RTE interview, “If we think our base case is to barely grow, a technical recession – falling into a mild recession – cannot be ruled out.”
