Lagarde warns of future ECB rate hikes despite deteriorating growth outlook via IrishTimesBiz
ECB president Christine Lagarde warned that government interventions to date had been too broad and untargeted and had the potential to undermine the ECB’s efforts to rein in price growthEuropean Central Bank chief Christine Lagarde has warned that Frankfurt will continue to raise interest rates even with economic activity expected to “slow substantially”.
“We expect to raise interest rates further over the next several meetings to dampen demand and guard against the risk of a persistent upward shift in inflation expectations,” she told the European Parliament’s committee on economic and monetary affairs. “Our destination is clear — an interest rate that will deliver 2 per cent price growth,” she said, noting this was the ECB’s primary mandate.
With inflation across the bloc running at a record 9.1 per cent, markets are pricing in another three-quarter point rate hike in October, translating into more expensive mortgages, loans and credit card debt for consumers. The increase will depend in large part on this month’s inflation reading, which is due on Friday.
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