Philip R. Lane: Energy, long-term interest rates and growth in the interview with ANSA

The interview of Philip R. Lane with ANSA was published on 6 October 2026.

Philip R. Lane, a member of the Executive Board of the European Central Bank (ECB), said in an interview with ANSA that energy prices were above the levels projected in the institution’s baseline scenario. However, he cautioned that this difference did not mean the economy was already in one of the alternative scenarios published by the ECB. In the same conversation, he addressed the risks to growth and the role of long-term interest rates in financing conditions.

Energy prices exceed the baseline assumption, but do not determine a scenario

Lane explained that the ECB’s scenarios use different assumptions both for oil and gas prices and for the strength of second-round effects and the speed at which higher energy costs feed through to headline inflation and the economy. Therefore, he said, observing that energy costs more than projected in the baseline scenario does not amount to confirming one of those scenarios: assessing it also requires monitoring how those other factors develop.

The chief economist said that, as of the time of the interview, the ECB had not observed very strong second-round effects and was continuing to monitor them. This assessment is limited to the information available at the time; it is not a statement that such effects could not emerge. The distinction matters when interpreting the message: Lane acknowledged the deviation in energy prices but did not present it as sufficient evidence on its own to anticipate the future path of inflation.

Mixed growth outlook and monitoring of financial conditions

On economic activity, Lane described a mixed picture. He mentioned very favourable data for the second quarter and said the third quarter could be moderately good, while also pointing to geopolitical risks and the energy shock. His assessment therefore combined positive activity signals with factors of uncertainty; he did not announce a definitive conclusion about growth.

He also explained that the ECB examines overall financing conditions, not just the policy interest rate. In its analysis, long-term interest rates have a material effect on the economy and inflation. Lane linked some of the increase in yields to the wave of investment in artificial intelligence in the United States: according to him, companies making these investments are raising significant amounts of financing through long-term debt.

The source of this increase in costs also matters. Lane said that an increase in long-term rates driven mainly by external and global factors, rather than European ones, restrains the European economy and, in itself, reduces inflation. He added that this effect is considered alongside the analysis of inflation and risks when deciding on the policy rate stance. He did not present long-term yields as a substitute for this broader assessment.

What data the ECB will monitor and what Lane said about public finances

Lane said the institution would study how changes in financial data affect investment and employment decisions. He cited bank lending surveys and business surveys as tools for observing these effects, and described the ECB’s monetary policy as data-dependent. Monitoring business financing is therefore part of the economic assessment, alongside inflation and activity indicators.

On fiscal matters, he argued that governments should be realistic when considering both the growth of the economy and the interest rates they will face in the coming years. He added that a high-interest-rate environment reinforces the importance of fostering growth and of the reforms recommended by Mario Draghi and Enrico Letta. These were the considerations Lane expressed in the interview; they do not constitute an announcement of new ECB measures or a specific recommendation for businesses.