The chief economist of the European Central Bank says the upper limit of the neutral interest rate range has slightly risen to 2.5%.

Lane stated at an event hosted by Deutsche Bank on Thursday that last week's interest rate hike decision may not have begun to curb economic growth yet. "Our tightening last week started from a clearly neutral position," Lane told the audience in Hertfordshire, north London. "We examined a range of neutral interest rate models, and we believe the upper end of this range has already risen from 2.25% to 2.5%." Lane's assessment contrasts with the analysis of European Central Bank economists at the beginning of 2025, when they believed the overall range was between 1.75% and 2.25%. Analysts and markets expect there will be one more rate hike this year. Nevertheless, warnings remain that raising borrowing costs will cause unnecessary economic pain, especially as growth in the eurozone is already sluggish.