The Nub

European Central Bank Chief Economist Philip Lane urged a “steady pace” of interest-rate increases in fighting record inflation to minimize negative consequences — seeming to push back after some of his colleagues floated a 75 basis-point hike at next week’s meeting.

Why Does it Matter

Lane, one of the 25-strong Governing Council’s most-dovish members, said the same overall boost to borrowing costs is less likely to generate adverse effects in the form of a “multi-step calibrated series rather than a smaller number of larger rate increases.” “A steady pace, that is neither too slow nor too fast, in closing the gap to the terminal rate is important,” Lane said Monday, according to remarks on the ECB’s website for a panel discussion in Barcelona.

The comments feed into a debate over the best way forward after the ECB raised rates for the first time in more than a decade last month. While euro-zone inflation is running at more than four times the 2% target, a recession is seen as increasingly likely as Russia limits energy supplies to the continent.

What Next

While Lane didn’t spell out whether he’d oppose a 75 basis-point step, his comments suggest officials would need to see the need for a higher “terminal rate,” or high point of the current hiking cycle, for him to support such a move. Among the more cautious voices on the Governing Council is Executive Board member Fabio Panetta, who said last week that policy maker must tread carefully as a significant economic slowdown would ease inflationary pressure. The latest reading for euro-area price growth is due Wednesday, with economists expecting an acceleration to an all-time high of 9%.