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European Central Bank President Christine Lagarde told a Croatian newspaper that wages in the eurozone are growing faster than previously thought and that the ECB should prevent this from adding to already high inflation.
The European Central Bank has raised interest rates by a total of 2.5 percentage points since July in a bid to stem a historic spike in inflation and has promised further monetary tightening at its upcoming meetings as price growth expectations in the long run they start to exceed his 2 percent goal.
“We know wages are rising, perhaps at a faster pace than expected. We must not allow inflation expectations to influence prices in the long run or wages to have an inflationary effect.”
Lagarde didn’t hint at any new action during the interview, but said the bank should “take the necessary steps” to bring inflation down to 2% from its current rate of nearly 10%.
Lagarde added that the expected winter recession in the European Union, caused by rising energy costs, is likely to be short and insignificant, provided there are no further shocks.
