ECB’s Lagarde: Inflation Expected to Remain Too High for Too Long
25 September 2023
By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Monday said that inflation was expected to remain too high for too long, but that key interest rates were now at levels that, if kept there long enough, would help restore price stability.
In prepared remarks before the Committee on Economic and Monetary Affairs of the European Parliament, Lagarde essentially reiterated her comments at the 14 September press conference after the Governing Council hiked rates by 25bp.
‘Inflation continues to decline but is still expected to remain too high for too long’, she said. ‘To reinforce progress towards our target, we decided to raise our key interest rates by 25bp earlier this month.’
‘Based on our latest assessment, we consider that our policy rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to our target’, she said.
Rates would be kept restrictive enough for as long as needed, and the ECB would stick to its data-driven approach, she said.