Brussels, Nov. 28 (BNA): The President of the European Central Bank said today, Monday, that she does not believe that inflation has peaked, after it reached an all-time high.
European Central Bank President Christine Lagarde also told European lawmakers that the bank is not raising interest rates to combat those rate hikes, according to the Associated Press.
Lagarde said there was a lot of uncertainty as to whether inflation, which hit 10.6% in October, will soon fall in the 19 countries that use the euro currency.
When looking at what drives inflation, “whether it’s food and commodities in general, or energy, we don’t see the ingredients or the trend that would lead me to believe that we’ve reached the peak of inflation and that it’s going to decline in a short time.”
This means that the central bank will “continue to tame inflation with all the tools we have”, primarily by raising interest rates, Lagarde told the European Parliament’s Committee on Economic and Monetary Affairs.
After the central bank’s third interest rate hike in October, marking the fastest pace of increases ever, the ECB expects to “raise interest rates to levels required to ensure that inflation returns to our medium-term target of 2% in due course,” she said. He said.
The European Central Bank has joined the US Federal Reserve and other central banks around the world in rapidly raising interest rates to combat inflation that has jumped as the global economy recovers from the COVID-19 pandemic.
Lagarde warned officials against exacerbating inflation by ensuring that subsidies are “targeted, tailored and temporary” for those who need them most and avoid weakening pressure to cut energy use.
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