ECB Chief Lagarde Cites Growing Inflationary Concerns

Source: ECB

Eurozone inflation could continue to breach the target raised by the European Central Bank before easing back to the 2% goal next year, according to a statement.

• ECB President Christine Lagarde cited growing inflationary concerns, which could indicate that the inflation uptick could be longer than earlier anticipated.
• Lagarde noted that factors could lead to stronger price pressures than expected, but such risks remain limited so far.
• The baseline scenario is expected to remain below the target over the medium term, with inflation predicted at 2.2% this year.
• This is then expected to ease to 1.7% by next year, and 1.4% in 2023, with Lagarde reiterating that the uptick remains transitory.
• Lagarde said the central bank has “every reason” to believe that any growth in prices is not going to be a lasting factor and will be reduced in 2022.