ECB’s Lagarde Promises to ‘Stay the Course’ on Rate Hikes to Fight ‘Far Too High’ Inflation

19 January 2023

By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Thursday said that the ECB would stay the course on rate hikes and was determined to return inflation to 2% in a timely manner.

Speaking on a panel at the World Economic Forum in Davos, Switzerland, Lagarde warned that ‘inflation, by all accounts, is still far too high.’

‘Our determination at the ECB is to bring it back to 2% in a timely manner, and take all measures that we have to take in order to do that’, she said.

The ECB would ‘stay the course’ and hike rates ‘until such time that we have moved to restrictive territory for long enough’ to return inflation to the 2% target, she vowed.

In the euro area, the ECB did not see inflation expectations de-anchoring ‘in any significant way’, she said.

‘What we have to avoid is that they be at risk of de-anchoring’, she added.

Lagarde noted that ‘the news have become much more positive in the last few weeks.’ 2023 would be ‘not a brilliant year, but a lot better than we had feared’, she said.

The European job market was also looking positive, ‘and has never been as vibrant as it is now’, she said. She commented that unemployment in Europe was ‘rock bottom’ compared to the previous 20 years.