Christine Lagarde has rejected calls for the European Central Bank to tighten monetary policy more quickly than planned in response to record inflation, saying it had “every reason not to act as quickly or as ruthlessly” as the US Federal Reserve.
Soaring energy and food prices lifted inflation in the eurozone to a record high of 5 per cent in December, well above the ECB’s 2 per cent target. The ECB president, however, predicted that inflation in the bloc would stabilise and “gradually fall” this year.
The Fed and the Bank of England are expected to raise interest rates several times after stopping their asset purchases this year. But the ECB in December said it was “very unlikely” to raise rates this year and outlined plans to continue bond purchases for most of 2022.