Speech by Philip R. Lane, Member of the Executive Board of the ECB, at the Barclays-CEPR Monetary Policy Forum 2025

London, 24 June 2025

Since the extraordinary inflation surges in 2021-2022, the primary challenge facing monetary policy has been to return inflation to target in a timely manner.^[1] In terms of interest rate policy, this required a rapid hiking cycle from July 2022 to September 2023, followed by a “hold at peak” phase and then a gradual reversal of the restrictive stance starting in June 2024.^[2] The gradualism in the easing phase reflected ongoing uncertainty about the speed of the disinflation process.

While headline inflation is currently around the target, services inflation still has some distance to travel to make sure that inflation stabilises at the target on a sustainable basis. Still, there has been sufficient progress in returning inflation to target to consider that this monetary policy challenge is largely completed. This assessment is reinforced by…