FRANKFURT, Oct 5 (Reuters) - The late summer surge in energy costs could be a drag on growth and such 'demand destruction' episodes can limit how much a central bank must tighten policy to quell price pressures, European Central Bank chief economist Philip Lane said. The ECB has raised interest rates twice this summer and markets see another two to three moves in the coming year on fears this increase will set off second-round price effects. Lane said underlying inflation indicators suggest that an upward shift in medium-term inflation has not taken hold and while growth has been surprisingly resilient, partly on government spending and AI investment, high energy costs could take their toll.
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