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European Central Bank will continue to raise its interest rate at a “sustained pace”

The president of the European Central Bank (ECB)Christine Lagarde, insisted this Monday, January 23, that interest rates will rise further. Lagarde told the annual reception for Deutsche Börse, manager of the Frankfurt Stock Exchange, that interest rates still need to “raise significantly at a sustained pace until they reach sufficiently restrictive levels and stay at those levels for as long as necessary.”

“A great challenge facing Europe is the environment of high inflation,” according to the ECB president.

The official also explained that inflation in Europe is too high, in part, due to vulnerability to changing energy geopolitics. So disengaging from Russia last year pushed eurozone energy inflation up to “extraordinary” levels.

He also noted that while energy inflation declines, the inflation underlying goes higher. Given this scenario, it is vital that inflation rates above the ECB’s target of 2% do not become entrenched in the economy.

“We must lower inflation and we will meet this objective,” added the ECB president.

He also recalled that, in less than half a year, the ECB has raised its key interest rates by 250 basis points, the fastest increase in the ECB’s history.

With information from EFE.

Source: Larepublica

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