ECB stimulus will continue until inflation on right path: Lane

LONDON (Reuters) - The European Central Bank will provide stimulus to the euro zone economy until the bloc's inflation rate is on the path towards its target, with March next year providing an important "staging post", Governing Council member Philip Lane said on Friday.

The ECB will likely decide in December, when it is presented with its quarterly macroeconomic projections, whether to continue its asset-purchase program beyond its March 2017 deadline, and at what pace.

Recent data has shown a slight uptick in inflation, but at an annualized 0.4 percent, it remains well below the central bank's 2 percent target.

"Until inflation is at a sustainable path to the current target, the current policy of accommodation will continue," ECB Governing Council member Philip Lane said at a Reuters Newsmaker event.

"March is in some ways an intermediary staging post and we have said in December we are going to have more data and new forecasts ... and at that point ... with that information, that is going to be a delta compared to now in terms of what we could decide (to do next)."

Lane said that ECB was "pretty happy" with the accommodation delivered by the central bank so far, adding that while negative interest rates may hurt bank profits, that effects of that had not been visible in the economic data.

"For the banking sector, negative rates for those holding excess liquidity is a headache but on the other hand low interest rates are supporting the general recovery," said Lane

"These side effects you cant rule them out but some of the potential downsides are not very visible in the data."

Investors no longer expect the European Central Bank to cut interest rates again this year.

(Reporting by Padraic Halpin and Marc Jones; Writing by John Geddie; Editing by Alison Williams)