ECB Must Raise Rates High Enough To Restrict Growth, Lane Says

FRANKFURT (Reuters) – The European Central Bank needs to raise interest rates further to a level that starts to restrict growth but it remains unclear where the eventual peak in the rate cycles will be, ECB chief economist Philip Lane told the Financial Times.

“Last year we could say that it’s clear that we need to bring rates up to more normal levels, and now we say, well, actually we need to bring them into restrictive territory,” Lane said in an interview.

Lane added that rates are now “ballpark” neutral where they are neither stimulating nor holding back growth and the peak will depend on how the economy responds to hikes that have already totalled 2.5 percentage points since July, the paper quoted him on Tuesday as saying.

(Reporting by Balazs Koranyi; Editing by Jacqueline Wong)