September 26, 2019 / 4:20 PM / 21 days ago

ECB's Lane says eurozone undergoing temporary weakness, but no recession

BERLIN (Reuters) - The European Central Bank’s decision further to loosen monetary policy had been controversial within the bank’s leadership because of the “ambiguity” over the current state of the Euro zone economy, its new chief economist said.

At its Sept. 12 monetary policy meeting, the ECB decided to resume asset purchases designed to loosen monetary policy, a decision opposed by a third of the policymakers, including Germany’s Sabine Lautenschlaeger, whose decision to resign before the end of her term was announced on Wednesday.

“The economic situation is quite ambiguous,” chief economist Philip Lane told Handelsblatt newspaper in an interview, when asked why policymakers had been so divided, saying the economy was undergoing “a temporary weakness, but there is no recession and the risk of deflation is currently small.”

Reporting by Thomas Escritt

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