LONDON, Nov 10 (Reuters) – Energy prices may be falling but the European Central Bank’s interest rate decisions will depend on how strongly the recent surge in fuel costs spreads to wages and other prices, the ECB’s chief economist said on Tuesday.
“If energy prices reverse – and they’re already reversing in the last week, if that continues – you could see headline (inflation) falling but core inflation moving up as the second-round effects from what’s already happened percolate,” Philip Lane told a conference in London.
“So I’m not going to convert it into a timeline for what exactly we do, but I would say people should be looking out for: ‘is it coming in stronger or weaker than your projections?’.”
(Reporting by David Milliken. Writing by Francesco Canepa in Frankfurt. Editing by Mark Potter)
