ECB chief economist says further rate hikes possible, dependent on data

16th Jun 2026 16:20

(Sharecast News) - The chief economist of the European Central Bank has said that policymakers could raise interest rates further if the incoming data supports the decision, after the ECB hiked its estimates for inflation over the coming years.

In the aftermath of last Thursday's ECB decision to raise its key interest rate to 2.25% from 2%, Philip Lane said: "Whether we do more or stay at the new level will be dependent on incoming data."

He acknowledged that energy prices have fallen since the monetary policy announcement, owing to the "welcome" peace deal between the US and Iran agreed in the past few days, but pointed out that oil prices were still higher than before the conflict began.

The ECB said last week that it expects harmonised consumer price inflation to average 3.0% this year, up from 2.1% in 2025 and 1.1 percentage points higher than its projections made in December.

Inflation is then tipped to slow to 2.3% in 2027 (0.5pp higher than previous estimates) and 2.0% in 2028 (no change from previous estimates).

In particular, the ECB raised its oil price projections for the next three years significantly. The central bank predicts an average oil price of $96.90 a barrel in 2026, up 55% from its previous projection in December and well ahead of the $69.10 level seen in 2025.

The ECB also raised its forecast for 2027 by 31.3% to $82.20 and for 2028 by 20.5% to to $77.10.

"What we have now already in the pipeline of inflation is a year of inflation above 3%," Lane said.