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The rise in prices reached a new phase that could be prolonged, said the president of the European Central Bank (ECB), Christine Lagarde, and warned that it is “unlikely” that the bank of the countries of the European Union will soon end with restrictive monetary policy.
Christine Lagarde, president of the European Central Bank (ECB), assured that there will be a new increase in interest rates in July and that the issuer is far from ending with its aggressive monetary policy, in an attempt to curb inflation.
“It is unlikely that in the near future the central bank will be able to say with full confidence that the maximum rates have been reached,” Lagarde said during her opening speech at the ECB’s annual forum in Sintra, Portugal.
The official insisted that monetary policy will remain at restrictive levels “as long as necessary”, eliminating any expectation that it would lower interest rates in the short term. “We still can’t declare victory,” she remarked.
The nature of inflation in the eurozone is changing, and interest rates will need to be higher for longer than once estimated, Christine Lagarde, the president of the European Central Bank, said at the central bank’s 10th annual conference in Portugal. https://t.co/ne23ncAGcc
— New York Times World (@nytimesworld) June 27, 2023
The ECB has raised rates by 400 basis points to return inflation to the 2% target, although the “full impact” of these measures is not yet evident, according to Lagarde.
The persistence of the problem, confirms the official, is that inflation went from being transitory, driven by the energy shock, to penetrating the economy in general, something that could be prolonged.
“This is weighing on productivity growth and (…) The motivation for companies to hoard labor may not disappear quickly,” Lagarde said.
This Wednesday, the head of the European Central Bank will sit down with the president of the United States Federal Reserve, Jerome Powell, and the governors of the Bank of England, Andrew Bailey, and Japan, Kazuo Ueda, in a panel expected by investors .
with EFE
