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ECB's new guidance can boost inflation expectations - Lane

ECB chief economist Philip Lane
ECB chief economist Philip Lane

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 today.

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

"In turn, stronger inflation dynamics are the key to eventual normalisation of policy rates," he added.