ECB’s Lane urges gradual rate reductions

European Central Bank (ECB) Chief Economist Philip Lane stated on Monday that the ECB should continue to cut interest rates gradually without committing to a fixed schedule.

Speaking in Luxembourg, Lane emphasised the importance of retaining flexibility in response to changing economic conditions.

Lane suggested that a gradual reduction in interest rates would be suitable if economic data aligns with current projections.

However, he acknowledged that the pace of rate cuts may need to be adjusted based on economic performance or inflation trends, with the potential for faster cuts if economic conditions worsen or slower adjustments if unexpected developments occur.