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Raising pace of bond buys not off the table for ECB: Lane

The European Central Bank could still increase bond purchases at its June meeting if such a move is needed to keep borrowing conditions favourable, ECB Chief Economist Philip Lane told a French newspaper.

He also said unemployment is not expected to return to its pre-pandemic level before 2023, a long process that will require a “sustained effort” from both the ECB and governments.

“We can increase or decrease our purchases depending on what is necessary to keep financing conditions favourable,” Le Monde quoted Lane as saying on Monday. “Our overall commitment is to maintain favourable financing conditions.”

The ECB will decide on the volume of bond buys on June 10 and while a few policymakers have called for a cut, there has been no visible push for an increase, suggesting that the choice is between maintaining the current pace or reducing the buys.

Lane’s comments suggest the decision remains open as the recovery is coming later than policymakers had hoped and the bloc’s economy still needs another year to grow back to its pre-crisis size.
Source: Reuters (Reporting by Dominique VidalonAdditional reporting by Balazs KoranyiEditing by Christian Schmollinger and Catherine Evans)

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