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ECB's Lagarde: Euro zone inflation remains 'way too high'

Published 01/19/2023, 06:21 AM
Updated 01/19/2023, 06:31 AM
© Reuters.

By Scott Kanowsky

Investing.com -- European Central Bank president Christine Lagarde has warned that inflation figures remain "way too high" despite optimism that price growth may have recently peaked.

Speaking at a panel at the World Economic Forum in Davos, Switzerland, Lagarde reiterated the ECB's plan to bring inflation in the euro zone back down to its 2% target through aggressive monetary policy decisions. The central bank has increased interest rates by a combined 250 basis points at its last four meetings as part of its ongoing fight to cool down red-hot inflation.

"We shall stay the course until such time when we have moved into restrictive territory for long enough so that we can return inflation to 2% in a timely manner," Lagarde said.

Lagarde previously told markets that the wave of borrowing cost hikes will not come to an early end this year, saying that there is still "more ground to cover."

Data earlier this month showed that headline price growth in the Eurozone slowed in December to an annual rate of 9.2%, thanks in large part to lower energy costs. However, the core inflation figure, which strips out volatile items like food and energy, rose to a fresh high of 5.2%, potentially dampening some hopes that the recent price spike has subsided.

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