ECB’s Lane Reveals in Private Meeting Inflation Target May Be Met by 2025: Report

By Reuters
September 17, 2021 Updated: September 17, 2021

FRANKFURT—European Central Bank (ECB) chief economist Philip Lane revealed in a private meeting with German economists that the ECB expects to hit its 2 percent inflation goal by 2025, the Financial Times said on Thursday in a report that was partly disputed by the bank.

The ECB had not made this long-term forecast public, meaning Lane could face questions from the public and lawmakers about the report, which suggests he revealed unpublished information to a select group of individuals.

The Times added that Lane told the German economists that the ECB’s “medium-term reference scenario” showed inflation rebounding to 2 percent soon after the end of its current forecast period.

The ECB, which initially declined to comment, later disputed the story, calling it inaccurate.

“Mr. Lane didn’t say in any conversation with analysts that the euro area will reach 2 percent inflation soon after the end of the ECB’s projection horizon,” an ECB spokesman said in a written statement.

The spokesman, however, did not comment on the 2025 date mentioned by the paper when asked.

Earlier this year, Lane was forced to suspend one-on-one meetings with investors immediately following policy meetings, due in part to public criticism of such engagements. But he has still been meeting with groups of economists.

The ECB updated its forecasts last week as it reduced the pace of its emergency bond purchases. It now sees inflation at 2.2 percent this year, 1.7 percent the next, and 1.5 percent in 2023.

The central bank has pledged not to raise rates until it sees inflation hitting 2 percent well before the end of its forecast horizon, which is typically between two and three years. Money markets have priced in a rate hike two years from now.