The European Central Bank must keep an open mind about the pace of interest-rate cuts as lingering risks in the global economy could still shift the outlook for inflation, according to Chief Economist Philip Lane.
Wage growth, profits and geopolitical tensions could push up energy prices and freight costs, creating new upward pressure on prices, Lane said Wednesday. On the other hand, a protracted hit to confidence could bring down inflation, while an increase in trade friction would make the outlook more difficult to model, he said.