According to Bank President Christine Lagarde, the European Central Bank (ECB) will intensify its fight against inflation if necessary. “We must not and will not allow high inflation,” the French woman stressed in Tallinn on Friday. The course of monetary policy can be tightened if necessary. This applies when there are signs that inflation is becoming more stubborn and there is a risk that inflation expectations will spiral out of control.
Lagarde added in her speech in the Estonian capital. The European Central Bank aims to achieve an inflation rate of 2.0% over the medium term. Recently, consumer prices in the eurozone have risen much further – to a record high of 10.7 percent.
Lagarde’s deputy Luis de Guindos also found clear words at a conference in Madrid: Monetary policy should continue to focus on reducing support for demand, the Spaniard said. It is important to guard against the risks of continued upward movement in inflation expectations.
The European Central Bank recently raised its key interest rate by 0.75 percentage points, with another unusually large move. The critical deposit rate in the financial markets is now 1.50%. Lagarde indicated further increases. The next meeting is scheduled for mid-December.
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