Recovery is gaining momentum. But the ECB must remain vigilant, says President Lagarde.
The President of the European Central Bank (ECB), Christine Lagarde, believes that monetary policy support in the euro zone is still necessary despite the economic recovery.
Although the recovery is picking up speed, the ECB must remain vigilant, said Lagarde on Monday at a hearing before the European Parliament’s finance committee. In addition, the central bank must ensure that monetary policy continues to provide a bridge to overcome the pandemic. In addition, according to Lagarde, state aid will continue to be necessary.
Against the backdrop of the economic recovery, Lagarde referred to the recent rise in market interest rates. These reflected the improved prospects for further economic development, said the ECB President. However, they could tighten financing conditions and pose a risk to economic recovery.
Lagarde once again made it clear that the ECB sees the recent rise in inflation as temporary. She referred to recent price developments in the US, where the inflation rate last rose to five percent in May. This could also reinforce inflation expectations in the eurozone. However, the impact on the euro area should be moderate, assured the central banker. Lagarde also made it clear that the ECB is closely following wage developments in the euro zone.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
