The era of extremely low inflation that preceded the pandemic is unlikely to return, European Central Bank President Christine Lagarde said on Wednesday, speaking at the annual central bank forum in Sintra, Portugal, on “monetary policy challenges in a it is changing rapidly “.
Central banks need to adjust to significantly higher expectations for price increases, the ECB chief said, as reported by Reuters.
Inflation, already above 8% in the 19-nation eurozone, is expected to rise further by early autumn, economists say, before it begins to fall slowly, which means it could remain above the ECB’s 2% target by 2024.
The ECB, meanwhile, promised to raise interest rates by 25 basis points in July, its first rise in a decade, followed by a potentially bigger move in September as it struggles to cope with painfully high prices.
Source: Capital
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