Current indicators suggest the European Central Bank should raise the interest rate in May, the monetary authority’s chief economist said. Future increases will depend on the economic data but this is still not the right time to stop, according to Philip Lane who believes the bank has to bring inflation back to the 2% target “in a timely manner.”Inflation in the euro area has dropped significantly between October, when it peaked at 10.6%, and March’s 6.9%.
“For our next Governing Council meeting on May 4, the current data are indicating that we should raise rates again,” said Philip Lane who sits on the bank’s Executive Board. He added that the analysis suggests it would be “inappropriate” to leave the deposit rate at the current 3% level and stressed: