By Marta Vilar – MADRID (Econostream) – European Central Bank President Christine Lagarde said on Tuesday that the ECB would take whatever action is necessary to prevent inflation from spiraling out of control.
In an interview with French radio France 2, Lagarde said that the economic situation stemming from the Iran conflict was “different” from the inflation shock in 2022.
“[W]e are in a better situation, and we have a greater capacity to absorb shocks,” she added.
The ECB would “do all that is necessary to ensure inflation is under control and French and Europeans don’t suffer the same inflation increases like those we saw in 2022 and 2023,” she said.
According to Lagarde, the level of uncertainty was so high that she was unable to anticipate the outcome of the ECB’s next monetary policy meeting on March 18–19.
“We won’t rush into a decision because there is too much uncertainty, too much volatility,” she said.
Lagarde suggested that the ECB would present different scenarios about the Middle East conflict after the monetary policy meeting.
“We model, we say ‘What do we do in this case? How do we react? Should we increase interest rates?’,” she said. “That’s the work we will do, that we’re already doing and that we’ll continue to do as long as we have this uncertainty and volatility.”
Lagarde dismissed suggestions that Europe was moving toward a period of stagflation.
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- ECB’s Villeroy: No Need to Raise Rates Now, But “Won’t Let Inflation Settle In”
- ECB’s Nagel: If Energy Price Surge Translates into Inflation, ECB “Will Act Decisively in a Timely Manner”
- ECB’s Kažimír: Policy Move “Potentially Closer Than Many People Think” Amid Iran War
