Lane: Inflation expected to slow significantly later this year

European Central Bank Chief Economist Lane believes that inflation in the 20-nation euro zone will fall significantly in the next few months, further evidence that interest rates are close to their peak.

While price pressures won‘t hit the ECB’s target until sometime in 2025, the recent fall in energy prices will soon lower costs across the economy, he said in a podcast produced by the ECB.

The easing of supply bottlenecks will also reduce inflation over time.

But at the same time, a domestic inflation component from rising wages and businesses seeking to rebuild profits is pushing underlying inflation higher.

With forces in the opposite direction, the ECB will rely on data to make policy decisions.