ECB: Lane, targeted aid against inflation and rising wages in Italy

In the face of high inflation, "it is important that low-income people are particularly protected through targeted measures." Philip Lane, chief economist and member of the ECB board, said this in an interview with ANSA, responding to a question on the Italian request for greater flexibility in view of the maneuver. But "a very general and widespread budget expansion will not help": income support from the budget law "should be as targeted as possible, because a trickle of budget support essentially increases demand in the economy, and this will not help inflation return to 2% quickly".

“In our September projections, we see that wages in Italy will grow more than inflation in 2027 and 2028” and “we believe that the good performance of the Italian economy should allow for improvements in real wages and living standards next year and the year after,” Lane then said, responding to a question about concerns about household purchasing power.

Lane underlined the "fundamental solidity" of the Italian economy and recalled that "relative wages are an important component of competitiveness". “Collectively, this very high energy price represents a loss for the European economy. And unfortunately it is impossible to say that we should fully protect all workers, at all times, from this loss.”

"Inflation is very harmful" and "people really suffer if inflation becomes too high" Lane responded to a question about the criticism, often made by politicians in Italy too, of ECB rate hikes. "If the inflation rate had remained at 3% or 4%" with an inertia after the Russian-Ukrainian energy shock - said Lane - "this would have been very harmful for Italian workers, for Italian families". If the ECB didn't raise rates when necessary, "inflation would be too high, and if people expected inflation to be too high, long-term rates would rise," Lane said, referring to spread tensions.