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ECB rate decisions sensitive to inflation risk shifts, Lane says

ECB chief economist Philip Lane
ECB chief economist Philip Lane

The European Central Bank will be attentive to any shift in the risk profile of euro zone inflation and the case for further policy easing would be strengthened if the risk of undershooting the target increased, ECB chief economist Philip Lane said.

"Shifts in the risk distribution will also matter for our rate decisions: an increase in the likelihood or intensity of downside risk factors would strengthen the case that a slightly-lower policy rate might better protect the medium-term inflation target," Professor Lane said in a speech in Frankfurt today.

"Alternatively, an increase in the likelihood or intensity of upside risk factors would indicate that maintaining the current policy rate would be appropriate in the near term," he added.