Former governor of the Irish Central Bank and European Central Bank, economist Philip Lane, said that we should see ECB 2% as the long-term minimum for rates.

Lane, in an interview published on the ECB’s website, said that there are expectations of another rate rise in March, and that the period of higher rates could be “quite long-lasting.”

He said that more and more people are starting to feel the effects of the rate rises that have already happened.

As fixed rates mortgage terms expire and as consumers look to change their car or borrow for other purposes, “more and more people will be exposed to the new interest rate environment.”

The economist went on to say that this increase in the number of consumers feeling the pain from the higher rates means the impact of the rate hikes is accumulating.

He claimed the central bank is seeing confirmation that its monetary policy is working.

More than a year after Russia’s invasion of Ukraine he welcomed the fact that the worst-case scenarios faced in the energy market have not materialised.

Lane described the strong decline in gas prices as a “favourable supply shock.”