The European Central Bank must keep raising interest rates in order to achieve the objective of bringing inflation back to 2%. Even with the odds of a recession in the Eurozone increasing. This is what ECB President Christine Lagarde said in an interview with the Latvian newspaper Delfi.
“Our mandate is price stability and we have to achieve that using the tools we have available”, explained Lagarde, reiterating the message she had conveyed at the end of last month, when the third consecutive rise in interest rates was announced, this time by 75 basis points.
“We are determined to do whatever is necessary to bring inflation back to the 2% target,” the president reiterated. The European monetary policy body has already risen 200 basis points in the last three meetings and markets point to the deposit rate reaching 3% in 2023.
For Christine Lagarde, “the path is clear and we are not there yet”, she revealed in an interview, without specifying when the rise in principal interest may end.
Inflation in the Eurozone rose to double digits in October, settling at 10.7% and is expected to remain above the value desired by the ECB until 2024. “The longer inflation remains very high, the greater the risk that spread throughout the economy,” explained Christine Lagarde.