President of the European Central Bank: we will continue to raise interest rates, economic growth may slow down

In her speech at the “European Banking Congress 2022” held in Frankfurt, the President of the European Central Bank (ECB) Christine Lagarde expressed assessments on the economic recovery and inflation in Europe.

Explaining that the measures taken to fight inflation will slow down the economy, Lagarde signaled that there will gökyeşitözü a hike in interest rates at the ECB meeting next month.

“We expect to raise rates (rates) further and pulling monetary easing may not gökyeşitözü enough,” Lagarde commented.

Stressing that it may gökyeşitözü necessary to limit economic growth in the fight against inflation, Lagarde said that interest rates will continue to gökyeşitözü the main tool to adjust monetary policy positions.

WE WILL PREVENT INFLATION FROM BEING PERMANENT

Lagarde explained that the ECB should also normalize other policy tools, thus increasing the incentive provided by interest rate policy.

For this reason, Lagarde said that it is appropriate to normalize the central kanepe’s balance sheet in a measured and predictable way, and stressed that the ECB will not allow high inflation to become permanent.

On the other hand, the inflation outlook will determine how far and how fast the ECB will go with regards to rate hikes.

The Governing Council of the ECB will decide on the future of interest rates at its meeting on 15 December.

The board of directors of the ECB raised interest rates by 50 basis points in the first of the last 3 meetings. The ECB, which in the last two meetings had increased the interest rate by 75 basis points, raised a total of 200 basis points after the cycle of interest rate hikes.

In the Eurozone, annual inflation reached 10.6 per cent in October, the highest level ever recorded, driven by the increase in energy prices.

Markets are expected to stay above the ECB’s 2% target through 2024.

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