ECB’s new guidance can boost inflation expectations, Lane says By Reuters

FRANKFURT (Reuters) – The European Central Bank’s new policy guidance can boost inflation expectations, paving the ground to higher interest rates down the line, the ECB’s chief economist Philip Lane said on Thursday.

“The systematic approach to monetary policy embedded in rate forward guidance has the capacity to boost inflation expectations and thereby strengthen inflation dynamics,” Lane said in a blog post.

“In turn, stronger inflation dynamics are the key to eventual normalisation of policy rates.”