ECB’s Lane: Case for 50 bps rate hike in March remains solid

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Positive supply shocks since December, rate hikes, have curbed inflationary pressures.

Case for 50 bps rate hike in March remains solid.

Intermediate stage pricing pressures begin to fade.

Need lower inflation projections, lower realised underlying inflation for rates hikes to end.

Forward-looking indicators for food, energy, goods suggest inflation slowdown.

Rate plateau should be held for some time; rates could be in restrictive territory for number of quarters.

Supply-side component of services inflation to ease; wage impact uncertain.