(Adds detail)
FRANKFURT, April 18 (Reuters) - The European Central
Bank's (ECB) chief economist on Tuesday backed a further
interest rate increase at the ECB's next meeting but said its
size would depend on incoming data, especially a survey of euro
zone banks.
The ECB is expected to raise rates for a seventh straight
meeting on May 4 in a bid to bring down stubbornly high
inflation in the euro zone, with policymakers converging on a
25-basis-point hike, sources with direct knowledge of the
discussion have told Reuters.
Philip Lane, who is in charge of making policy proposals at
the ECB, said a rate hike was "the baseline" after tensions in
the banking sector receded, supply bottlenecks eased and gas
prices fell.
"As of now, two weeks away, I think the baseline is that we
should increase interest rates in May but what we do in terms of
scale, I'm not going to set a default number," Lane said on
Bloomberg TV.
He said the size of the hike would depend on data including
a preliminary estimate of the inflation rate in April, which
will come out a day before the meeting, and GDP data for the
first quarter of the year scheduled for the Friday before.
But Lane singled out the ECB's own Bank Lending Survey
(BLS), in which banks are asked about the supply and demand of
credit, as "the most important".
"That's the most important survey for us in understanding
whether we are indeed seeing further tightening of credit
conditions," Lane added.
The next BLS is scheduled to be published on May 2, along
with Eurostat's flash inflation estimate for April.
(Reporting by Francesco Canepa
Editing by Mark Potter)
004906975651247; Reuters Messaging:
francesco.canepa.thomsonreuters.com@reuters.net))
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