The European Central Bank can’t relent in its fight to tame inflation even as maintaining the current level of interest rates is the “base case,” according to Chief Economist Philip Lane.

“Price increases are still well above 2%, we are not at the inflation target yet and therefore there is still work to be done in terms of bringing inflation down,” Lane said at a conference in Vilnius, Lithuania, on Tuesday.

The chief economist said that ECB borrowing costs have now “reached a level that will make a substantial contribution to get inflation to target” and that the “base case is to maintain this level for as long as needed.”

He warned against being overly fixated on the institution’s December meeting, when new economics forecasts are presented.

“Regardless of whether it’s December, next March, next June, there’s a lot of uncertainty — some of this uncertainty will not be defused by December,” he told reporters. “I would not over-focus on December as a critical decision.”

The ECB has raised rates in 10 consecutive increases and economists and markets expect the deposit rate to stay at its record 4% through the first half of 2024. Last week’s inflation numbers back up that notion, with consumer-price growth moderating to 4.3% and core inflation, which strip out energy and food costs, to 4.5%.

Lane acknowledged that getting inflation from that level to the ECB’s 2% target will take time — the central bank’s most recent forecast sees it hitting that goal in the third quarter of 2025.

“We don’t expect the current low gas price to be maintained, we do expect to see gas prices go up from where they are now,” he said. “Energy has been such a volatile component, it’s going to be very important to us to keep an eye on energy in the coming months and years.”

Speaking at the same event, Lithuanian central bank chief Gediminas Simkus highlighted that inflation still faced many “lines of resistance” and that “maintaining interest rates sufficiently high is very important and critically important on the path to returning inflation to the target.”

Some policymakers have suggested more might be needed: Tuomas Valimaki, the official standing in for Finland’s Olli Rehn on the Governing Council, said Tuesday that the ECB’s pledge to keep borrowing costs at an elevated level for an extended period doesn’t rule out more rate hikes.

“Because inflation is staying above the target for this long, any additional delay in achieving the target cannot be considered acceptable,” he said.

--With assistance from Kati Pohjanpalo.

(Updates with Lane comments on ECB’s base case starting in first paragraph, Finland’s Valimaki in penultimate.)