ECB’s Lagarde: Fight Against Inflation Not Over Yet

24 November 2023

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Friday said that the ECB had put a lot of effort into fighting inflation but warned that it was too soon to consider victory over it.

Answering questions from the audience during the Euro 20+ youth event organised by the German Bundesbank in Frankfurt, Lagarde said that ‘[T]he battle is not over and we’re certainly not declaring victory’.

‘I think this [fall in inflation in the last 12 months] is progress', she said. '[A]t the point where we are, given the amount of ammunition that we have used, we can observe very attentively the components of our lives like salaries, like profits, like fiscal, like geopolitical developments and certainly, the way in which our ammunitions are impacting economic life to decide how long we have to stay there and what decisions we need to make upper down. But we will win this battle, I can assure you.

The consequences of geopolitical fragmentation on prices were not completely evident yet, she said, but could become clearer if ‘this geopolitical fragmentation continues to be the rule of the game.’

The ECB should not have a role in fiscal policy, she said.

‘That dichotomy between our monetary union and the fiscal fragmentation, which is not helped by the current vacuum about the rules, is an issue that needs to be addressed as well’, she said.