“We are determined to ensure that inflation will return in time to the medium-term target of 2%”, emphasizes the president of the ECB
The unanimous decisionof the Governing Council of the European Central Bank, that any discussion of a reduction in key interest rates is premature, said ECB President Christine Lagarde.
During the press conference following the ECB's decision to keep the three key interest rates unchanged, President Lagarde stressed that decisions are always made on the basis of economic data. “We are determined to ensure that inflation returns to the medium-term target of 2% in time. Based on our current assessment, we believe that key ECB interest rates will make a substantial contribution to this objective,” he argued.
According to the ECB president, future decisions will ensure that interest rates are set at ” sufficiently restrictive levels' for as long as necessary. “In any case, we are ready to adjust all the instruments at our disposal, within our mandate, to ensure that inflation returns to our medium-term objective,” he said.
The ECB president has repeatedly referred to the Russian invasion of Ukraine, the tragic events in the Middle East and attacks on merchant ships in the Red Sea as affecting the cost of goods and services resulting in inflationary pressures.
« Inflation could remain higher than expected if wages (including in the Eurozone) rise more than expected or corporate profit margins are wider than data currently suggests.
Conversely, inflation may fall significantly if monetary policy decisions reduce demand or if the economic environment in the rest of the world deteriorates unexpectedly. In addition, inflation could fall faster in the near future if the price of energy falls further,” said Christine Lagarde.
Message to States – EU members: Proceed immediately to reform fiscal rules
President Lagarde also referred to the recent, historic, decision of the EU Economic and Fiscal Affairs Council (EcoFin) to reform the EU's fiscal rules, calling on national governments – members of the Eurozone and the EU to immediately proceed with their implementation, at the same time asking national governments to immediately stop support measures for households and businesses, which increase inflationary pressures, and to proceed with necessary structural reforms to reduce public debt . “It is also imperative to speed up progress towards the Capital Markets Union and the completion of the Banking Union,” stressed Christine Lagarde.
source: Topic< source srcset="https://i1.prth.gr/images/1168x656/_webp/files/2023-11-20/lagarde_1.jpg" type="image/webp" media="(min-width: 641px)" />