Lane: ECB Rate Hikes Must Prioritize Inflation Target Over Mortgage Borrowers

European Central Bank (ECB) Chief Economist Philip Lane has pushed back against the idea that interest rate hikes should be avoided due to their impact on mortgage borrowers. In an interview, Lane stated that tolerating excessively high inflation as a consequence of avoiding rate hikes would be a 'false economy'.

Lane emphasized that the ECB's decisions on interest rates would depend on what is required to return inflation to its 2% target and on the strength of economic activity.

He declined to give a forecast on whether another interest rate increase by the end of the year was expected, but emphasized that any decision would prioritize returning inflation to target levels.