European Central Bank President Christine Lagarde said eurozone wages were growing faster than previously thought and 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 last July in a bid to stem the historic rise in inflation, and has promised further monetary tightening at its upcoming meetings, at a time where long-term price growth expectations begin to exceed the 2% target rate.
“We know that wages are rising, perhaps faster than expected. We must not allow inflation expectations to influence prices in the long run, or wages to have an inflationary effect,” Lagarde told Croatian newspaper “Jutarni List”. on Saturday.
Lagarde did not 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 near 10%.
He added that the expected winter recession in the European Union, caused by high energy costs, is likely to be short and insignificant, provided there are no further shocks.
