MADRID, 6 Mar. (EUROPA PRESS) -

The high level of underlying inflation in the euro area, which discounts the volatility of energy and food prices, suggests that it will be necessary to continue raising interest rates beyond the meeting on March 16, according to said Philip Lane, executive of the European Central Bank (ECB) and chief economist of the institution.

In his analysis of the evolution of inflation in the euro zone during a conference in Dublin, the Irish economist pointed out that the first signs of easing inflationary pressures are on the horizon, although he stressed that these are still very strong.

In this sense, although there are weaker pressures from raw materials and energy, as well as from economic activity and bottlenecks on the supply side, cost indicators related to food and the labor market indicate stronger pressures. strong, particularly from a tight labor market and wage growth.

Thus, given that for the ECB the monetary policy priority is for inflation to return to the 2% target in a timely manner, current information on underlying inflationary pressures suggests that "it will be appropriate to raise rates beyond the March meeting.

In this regard, Lane has reiterated that the exact calibration of future interest rate hikes beyond March should reflect the information contained in the forthcoming macroeconomic projections, together with incoming data on inflation and the operation of the transmission mechanism. monetary.

By tightening rates sufficiently and encouraging a period of below-trend growth through reduced demand, this will offset medium-term above-target inflationary pressures and also ensure that there is no de-anchoring of prices. inflation expectations, has defended.

In particular, for the ECB executive, the decrease in demand through the tightening of monetary policy in the euro zone "means that those who set prices and wages know that excessive price and wage increases will not be sustainable."