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Lagarde announced that there will be new rate hikes in March

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In addition, Lagarde warned that “interest rates will not return to where they were 3-4 years ago, the Euribor was negative, these types make inflation go down. Our projection is that inflation will return to 2% in 2025. It’s a pretty decent rate.”

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The inflation year-on-year for the euro area reached February 8.5%, against 8.6% in January, indicated the European statistics agency Eurostat. Although this is the fourth consecutive drop in the inflation rate, most analysts and experts expected a more marked contraction. Eurozone inflation had reached a record high of 10.6% in October 2022.

However, private activity in the Eurozone this month reached a maximum since last May, warding off the chances of a recession

Another question has been if the ECB made a mistake by not raising interest rates in the last 11 years. “In June 2022 we decided to raise interest rates and we did so consistently, We could have started earlier, yeah…But there wouldn’t have been much of a change. I focus on lowering inflation,” Lagarde replied.

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Regarding the economic situation in Europe, the president of the ECB has said that “It is a mistake to compare Europe with the United States, it is different. With the war in Ukraine… everything has been different“He said, referring to the scenario in the continent which, after the outbreak of the war, was hit hard by the rise in energy and food prices.

In parallel, the eurozone unemployment rate closed January stable at 6.7% of the economically active population in relation to December last year, and remains close to its lowest historical levelaccording to data released this Thursday.

According to the European Statistics Agency Eurostatunemployment in the euro area thus experienced a contraction of 0.2 percentage point compared to January 2022.

Source: Ambito

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