ECB’s Lagarde: Need to Ensure Disinflation; Focus on Services Data
4 July 2024
By Isabel Teles – SINTRA, Portugal (Econostream) – European Central Bank President Christine Lagarde on Thursday said that the ECB needed to ensure the continuation of the disinflation process and that this required information related to services prices in particular.
In an interview with Portuguese broadcaster RTP on the margins of the ECB Forum on Central Banking, Lagarde said, ‘This disinflationary path that I have described is going to continue, but we need to make sure that this is in fact the case, because we don't want inflation to come up again’
The Governing Council would continue to base its decisions on data, she said. ‘And we need a thorough data on three key accounts: wages, profits, productivity', she said. 'Because they contribute a lot to services.’
‘So, that set of data, productivity being another one, needs to come together and for that, we also need to assess transmission of monetary policy, underlying inflation, the inflation outlook. We need a lot of data’, she said.
Theoretically, it would be possible for the ECB to decide to cut interest rates in any monetary policy meeting if there were data to support it, but practice might not reflect this, she said.
‘I'm not sure that we are getting those data at every single monetary policy Governing Council meeting that we have’, she said.