2023-05-10 10:53:55
Despite all the efforts made within the euro zone to contain inflation deemed still too high, the President of the European Central Bank raised the possibility of a new rate hike.
By Le Figaro with AFP
Published
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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 deemed too high. Over the past nine months, the European monetary institution has “acted very deliberately and decisively in order to fight inflation» with seven rate hikes in a row until May, recalled Christine Lagarde in this interview with the daily Nikkei.
” READ ALSO – Euro zone: inflation starts to rise once more in April, at 7% over one year
The French leader, however, acknowledged that there was still “still a long way to gosuggesting that the guardians of the euro will have to further tighten the screw on credit, its favorite weapon to lower price pressures. Foodstuffs and a wide range of goods continue to see their prices rise. Inflation in the euro zone reached 7% in April, still sailing well above the 2% target set by the ECB.
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Rising prices weigh on household purchasing power
«There are factors that may induce significant upside risks to the inflation outlook», «in particular, with regard to salary increases in various European countries“, according to Christine Lagarde. The rise in prices weighs on the purchasing power of households and fuels demands for wage increases. Economists now expect the monetary institute to raise interest rates at its two scheduled meetings before the summer break.
” READ ALSO – ECB: 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 deal with the energy supply having to do without Russian gas, believes Christine Lagarde. However, according to her, a shadow remains on the board: great uncertainties remain, “including what will happen in Russia’s war of aggression once morest Ukraine, and some emerging signs of weak demand for manufactured goods».
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