HomeEconomyInterest rates will continue to rise at a 'constant pace', says Lagarde

Interest rates will continue to rise at a ‘constant pace’, says Lagarde

The president of the European Central Bank reaffirmed on Monday his intention to continue raising interest rates to fight inflation that is still too high in the euro zone.

“ECB interest rates will still need to rise significantly at a sustained pace to reach sufficiently restrictive levels” (ie, penalize for activity, editor’s note) and “stay there for as long as it takes,” the central banker said during an operator reception. from the Frankfurt Stock Exchange.

In less than six months, the ECB raised its reference rates by 2.50 percentage points, the fastest rise in its history.

“We must reduce inflation” and “we will achieve this goal,” Lagarde insisted.

At the moment, inflation in Europe “is too high,” Lagarde said at the Davos forum last week.

This is “partly due to our vulnerability to changing energy geopolitics,” he explained.

Return to 2% inflation as soon as possible

“The disengagement with Russia last year” since the start of the invasion war in Ukraine “has driven energy inflation in the euro zone to extraordinary levels”, causing prices to rise more than 10% in total in October.

While energy inflation has fallen recently, core inflation (excluding energy and food prices) continues to rise.

“It is therefore vital that inflation rates above the ECB’s 2% target do not take root in the economy,” Lagarde concluded.

Specifically, the guardians of the euro will raise interest rates in February and most likely in the following months.

“In other words, we will stay the course to guarantee the rapid return of inflation to our target” of 2%, concluded Lagarde, while the fall in purchasing power linked to the rise in prices prevails as one of the main concerns of the Europeans.

Author: CO with AFP
Source: BFM TV

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