ECB faces call to end private meetings after Lane leak


European Central Bank Chief Economist Philip Lane speaks at a Reuters Newsmaker event in New York, United States, September 27, 2019. REUTERS / Gary He

FRANKFURT, Sept. 17 (Reuters) – The European Central Bank faces a call to end the practice of holding closed-door meetings with the private sector after ECB chief economist Philip Lane allegedly leaked a forecast inflation rate not published during one of these events.

The Financial Times reported on Thursday that Lane revealed in a private meeting with German economists that the ECB planned to meet its 2% inflation target by 2025 – information that was not in the public domain and which could be used to make future deductions. trajectory of interest rates. Read more

The newspaper’s report was partly contested by the ECB, the central bank of the 19 countries that share the euro.

Sven Giegold, a prominent member of the European Parliament, told Reuters he would ask in a letter to ECB President Christine Lagarde that such meetings be suspended.

“The ECB must end the practice of exclusive meetings with the private sector when what it says is not transparent,” Giegold told Reuters.

An ECB spokesperson declined to comment on Giegold’s comments.

Eurozone government bond yields rose and the euro rebounded after the FT report was released, and did not reverse the trend after the partial denial.

The FT said Lane told the hearing that the ECB’s “medium-term baseline scenario” showed inflation to rebound to 2% “shortly after the end of its three-year forecast period.”

The ECB took issue with the details of the report, which it called inaccurate, and the FT’s conclusion that eurozone interest rates could be raised in 2023.

“Mr Lane has not said in any conversation with analysts that the euro area will hit 2% inflation soon after the end of the ECB’s projection horizon,” a spokesperson for the ECB said on Friday. BCE in a written statement.

Asked about the date of 2025 mentioned by the newspaper, the spokesperson did not comment.

A spokesperson for the Financial Times said the newspaper was sticking to its report and article.

Giegold, the Greens’ coordinator on the European Parliament’s committee overseeing the ECB, said the confusion showed that the ECB’s communications approach had “totally failed”.

“You don’t know whether to believe the newspaper or the ECB’s public message,” said the German politician.

“This approach has totally failed and the ECB must change its strategy.”

He said the ECB should either end such meetings or publish tapes to avoid confusion.

The ECB updated its economic forecast last week, when it also slashed the pace of its emergency bond purchases in the event of a pandemic. He now sees inflation at 2.2% this year, 1.7% next year and 1.5% in 2023. read more

The central bank has pledged not to raise rates until it sees inflation hit 2% well before the end of its forecast horizon, which is typically between two and three years. Money markets have taken in a rate hike in three years.

Earlier this year, Lane was forced to suspend one-on-one meetings with investors immediately after political meetings, in part because of public criticism of such commitments. But he always met groups of economists.

At the time, ECB President Lagarde defended “the exchange of views with representatives of the private sector – including financial market players” because they help to transmit central bank policy to the economy.

Editing by Catherine Evans

Our Standards: Thomson Reuters Trust Principles.


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