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ECB: Christine Lagarde paves the way for further rate hikes

2023-05-10T11:07:02.653Z

Highlights: Eurozone inflation reached 7% in April, still well above the ECB's target of 2%. Economists now expect the monetary institute to raise interest rates at its two meetings scheduled before the summer break. Rising prices weigh on households' purchasing power and fuel demands for wage increases. The French leader acknowledged, however, that there was "still some way to go", suggesting that the guardians of the euro will still have to tighten the screws on credit, her favorite weapon to lower price pressures."There are factors that can lead to significant upside risks to the inflation outlook", says Christine Lagarde.


Despite all the efforts made within the euro zone to contain inflation deemed still too high, the president of the European Central Bank has raised the possibility of a further rate hike.


The president of the European Central Bank (ECB), in an interview published Wednesday in the Japanese press, leaves the door open to further rate hikes, in the face of inflation still considered too high. Over the past nine months, the European monetary institution has "acted very deliberately and decisively to fight inflation" with seven rate hikes in a row until May, said Christine Lagarde in this interview with the Nikkei daily.

" READ ALSO Eurozone: inflation rises again in April, to 7% over one year

The French leader acknowledged, however, that there was "still some way to go", suggesting that the guardians of the euro will still have to tighten the screws on credit, her favorite weapon to lower price pressures. Prices for food and a wide range of goods continue to rise. Eurozone inflation reached 7% in April, still well above the ECB's target of 2%.

Rising prices weigh on households' purchasing power

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There are factors that can lead to significant upside risks to the inflation outlook", "in particular, with regard to wage increases in various European countries", according to Christine Lagarde. Rising prices weigh on households' purchasing power and fuel demands for wage increases. Economists now expect the monetary institute to raise interest rates at its two meetings scheduled before the summer break.

Read alsoECB: tightening of credit criteria in the first quarter, the strongest since the 2011 crisis

Regarding the economy, the euro zone is "in a better position than we feared six months ago", when Europe had to prepare for energy supply by having to do without Russian gas, says Christine Lagarde. However, a shadow remains, she says: great uncertainties remain, "including what will happen in Russia's war of aggression against Ukraine, and some emerging signs of weak demand for manufactured goods."

Source: lefigaro

All news articles on 2023-05-10

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