ECB’s Lane: Trust the Central Bank When It Says Inflation Will Return to Target

Lane's framing of the episode as a medium-sized shock, paired with his expectation of renewed food-price pressure next year, is the part worth noting: it suggests the ECB is not treating the current inflation path as a reason to abandon its stated target, even as one component of the basket is flagged as turning less favourable. The credibility argument cuts both ways, since the same officials asking to be trusted on the target are the ones signalling a measured rather than aggressive response. Whether food prices actually firm up next year, and whether that shifts the measured stance, is the open question.