The European Central Bank’s mission, according to Lagarde, is to stabilise prices, and this must be accomplished using all available tools. “We are determined to do everything necessary to re-inflation to the target rate at 2 percent,” Lagarde said in an interview with the Latvian news website Delphi, which was published by Reuters on Tuesday.
Over the course of its last three sessions, the central bank boosted interest rates by 200 basis points.
According to market estimates, the bank’s potential for a number of other actions might result in an increase in the interest rate on deposits, which is now 1. 5 percent will be equivalent to about 3 percent in 2023.
Lagarde stated, without specifying the ceiling at which interest rates could not go any further, “The goal is clear and we have not yet attained it.”
Future interest will be higher, she continued.
The rate of inflation rose to 10.
7 percent in October, and it is expected that it will remain above the European Central target to 2024, which increases the chances that companies and families begin to adjust their spending while losing confidence in the central desire to contain inflation.
“More consequences across all areas of the economy,” Lagarde added, “the longer the period of inflation persists at these high levels.”
Lagarde: Despite the possibility of stagnation, we will keep raising interest rates.
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