Bloomberg: Lagarde prepares for ECB ‘launch’ due to new record inflation

Discussions within the European Central Bank about how aggressively monetary policy should be tightened are likely to intensify this week before decisions are made, as the data likely point to a new record for inflation, according to Bloomberg.

All but one of the economists surveyed by Bloomberg’s forecast forecast an acceleration in annual price growth, with an average estimate of 7.8%. Of the four largest economies in the euro area, only Spain will not show an acceleration of inflation.

The figures will come amid a heated public debate on interest rates by ECB officials, whose window to speak before the June 9 ruling will close on Thursday.

In the background, meanwhile, exchanges between officials in Frankfurt and central banks across the eurozone will also accelerate as they finalize crucial forecasts for President Christine Lagarde, who will present next week a choreography of the scheduled meeting. in September.

All of this will be crucial for officials who disagree on how quickly and how much interest rates will rise. Dutch central bank governor Klaas Knot, who does not rule out an aggressive half-point increase, as the US Federal Reserve did this month, cites inflation and related underlying indicators as key items to monitor.

“These new numbers are extremely important in determining the speed with which interest rate hikes should be made,” said Giorgio di Giorgio, a professor at the University of Luiss in Rome, in an interview. “There is a real tangle of factors that have come together to complicate the picture, from the pandemic to the supply straits, then the war in Ukraine, now China’s zero-sum Covid policy and its implications.”