ECB’s Lane sees euro area slowdown, does not rule out technical recession

The euro zone’s economy is likely to experience an economic slowdown, European Central Bank’s chief economist Philip Lane said on Tuesday, adding however that he did not rule out a mild, temporary and technical recession.

Lane told Spanish broadcaster TVE that the ECB should raise interest rates on a step-by-step basis. The institution raised rates by 50 basis points to zero in July.

While a similar move was expected in September until very recently, a host of policymakers have made the case for a larger hike due to the worsening inflation outlook.