Lagarde: there are no signs of slowing inflation in the eurozone yet

The head of the European Central Bank, Christine Lagarde, said during her speech in Frankfurt that she sees no signs of a slowdown in core inflation in the eurozone, and the growth rate of consumer prices in general remains high.

Since July last year, the central bank has raised interest rates by 350 basis points. Nevertheless, inflation remains high, and uncertainty about its further development is increasing.

Last week, the ECB raised interest rates by 50 bps. According to Lagarde, this step was necessary in order to weaken demand and maintain strong control over inflation expectations. 

The politician also noted that in conditions of high uncertainty, it is very important that the decision to change the rate is made on the basis of incoming data. Therefore, it is now impossible to predict what step the ECB will have to take – a further rate hike or a pause in its rise.

In general, the head of the central bank predicts that the growth rate of consumer prices is likely to slow down sharply this year due to falling energy costs and improving the situation in global supply chains. However, core inflation (excluding energy and food prices) remains strong.