Regulatory News
ECB’s Lane flags ‘middle path’ as energy shock drives inflation
ECB executive board member Philip R. Lane said the bank remains on a “middle path” after an energy shock drove inflation higher, with policy still meeting by meeting and data dependent.
- Lane said September headline inflation was 3.8% and energy inflation 18.8%.
- He said the ECB raised the policy rate from 2.00% to 2.50% over June and September projection rounds.
- He said the ECB is not on a pre-committed rate path.
Action
Philip R. Lane, a member of the ECB Executive Board, said the ECB remains in the “middle path” for monetary policy. He said future interest rate decisions will be taken on a meeting-by-meeting, data-dependent basis.
Lane said it was prudent to raise the policy rate from 2.00% to 2.50% over two projection rounds in June and September. He said the bank is not on a pre-committed rate path.
Respondents
Lane delivered the keynote speech at the ECB Conference on Monetary Policy 2026: bridging science and practice in Frankfurt am Main on 5 October 2026.
He said the ECB’s interest rate decisions are based on three criteria: the inflation outlook and its risks, underlying inflation dynamics and the strength of monetary policy transmission.
Effective
Lane said the ECB’s September inflation data showed headline inflation at 3.8%. Energy inflation was 18.8% and non-energy inflation 2.3%.
He said the fourth quarter of 2025 was a pre-shock benchmark, with headline inflation at 2.1%, energy inflation at -1.1% and non-energy inflation at 2.4%.
He said the ECB’s September projections expect non-energy inflation to average 2.6% in 2027 before falling back to 2.3% in 2028.
Penalty
No penalty was announced.
Source: ECB,