European Central Bank Chief Economist Philip Lane said on Friday that if the inflation outlook deteriorates, the ECB will rethink its timeline for ending Quantitative Easing (QE), reported Bloomberg. Lane's comments come after the preliminary estimate of the Harmonised Index of Consumer Prices (HICP) released earlier in the session showed Eurozone prices rose at a staggering 7.5% YoY pace in March, well above the expected pace of 6.6%, with the leap from 5.9% in February driven by a 3.0% MoM gain in prices, according to the HICP. 

Lane commented that Friday's inflation reading was very high and said that there will be more momentum behind inflation from higher energy prices. At the upcoming meetings, he continued, we'll analyse the first-order impact of higher energy prices, as well as the hit to confidence. Signs of wage responses to inflation were very mild earlier this year, he noted, before cautioning that inflation has risen yet again. However, he noted, it remains the case that wages are responding in a very limited way. The ECB's chief economist commented that firms are facing higher costs and lower demand and have to take that into account when setting wages. We should take our time using quarterly forecasts, Lane said.