Breaking News
Investing Pro 0
Cyber Monday SALE: Up to 54% OFF InvestingPro+ CLAIM OFFER

Lagarde comments at ECB press conference

Economy Dec 16, 2021 09:47AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: President of the European Central Bank (ECB) Christine Lagarde speaks as she takes part in a news conference on the outcome of the Governing Council meeting, in Frankfurt, Germany, October 28, 2021. REUTERS/Kai Pfaffenbach/File Photo/File Phot

FRANKFURT, Dec 16 (Reuters) - The European Central Bank cut support for the euro zone economy by another notch on Thursday but promised copious support for 2022, confirming its relaxed view on inflation and indicating that any exit from years of ultra-easy policy will be slow.

Following are highlights of ECB President Christine Lagarde's comments at a news conference after the policy meeting.

INFLATION HARD ON CONSUMERS

"Inflation is very hard on consumers... There is a trail between energy prices ... and retail prices and we have to respond and we are responding."

PRICE IMPACT OF ENERGY DEMAND

"Energy is more than two-thirds of this very significant difference between our September projections and our December projections. The other part of it is essentially related to the longer duration of the supply bottlenecks."

ENERGY DEMAND UNEXPECTEDLY STRONG

"Energy prices is not something that you can anticipate, diagnose. It comes as a result of a lot of geopolitical issues. It comes as a result of a very significant demand that very few people had expected to be at that level. It comes from some climate-related issues as well."

NOT AT INFLATION TARGET

"In relation to our inflation projection for 2023 and 2024, which are at 1.8%, respectively, a small 1.8% and a slightly higher 1.8% for 2024, we are really making progress towards target.

"Are we at target? Given that our target is 2% over the medium term and looking at the three criteria of our forward guidance, not quite."

POSSIBLE INFLATION RISK

"Is there an upside (inflation) risk? There is possibly an upside risk, but I think that staff in putting their projections together, having (in) particular anticipated some impact on wages, we are as you know looking very, very carefully into wages, into negotiations to determine how much of a second round effect there would be on inflation."

WAGE PRESSURE WEAK

"On the wage account and how much of a second-round effect it would have, as I said, we are extremely attentive to what happens on a weekly basis. But what we are seeing now certainly is significantly below the levels that have been factored into the projections that we have."

2022 RATE HIKE UNLIKELY

"We are driven by data and we will be reviewing next March, next June, next September. As we receive updated projections, we will reassess... we will adjust in either direction depending on the data that we receive.

"But suffice at this point to indicate that under the present circumstances, as I have said before, it is very unlikely that we will raise interest rates in the year 2022. That still stands.

"But we have to be very attentive to what data tells us. And we will do so at each and every monetary policy meeting."

ON SUPPORT FOR THURSDAY'S MEASURES

"There were a few members who did not agree with one or the other elements of the package and therefore did not support it all. But I can tell you that it was a very, very broad majority that supported the whole package."

BALANCED RISKS

"We see the risks to the economic outlook as broadly balanced. Economic activity could outperform our expectations if consumers become more confident and save less than expected. By contrast, the recent worsening of the pandemic, including the spread of new variants, could be a more persistent drag on growth."

INFLATION OUTLOOK

"The future path of energy prices and the pace at which supply bottlenecks are resolved are risks to the recovery and to the outlook for inflation. If price pressures feed through into higher-than-anticipated wage rises or the economy returns more quickly to full capacity, inflation could turn out to be higher."

ENERGY PRICES

"The upswing in inflation primarily reflects a sharp rise in prices for fuel, gas, and electricity."

ELEVATED INFLATION

"(Inflation) will remain above 2% for most of 2022. Inflation is expected to remain elevated in the near term, but we expect it to decline in the course of next year."

BOTTLENECKS

"Shortages... are hampering production of manufactured goods, causing delays in construction and slowing down the recovery in some parts of the service sector. These bottlenecks will still be with us for some time, but they should ease during 2022."

STRONG REBOUND

"Looking ahead, we expect growth to rebound strongly over the course of 2022."

PANDEMIC UNCERTAINTY

"Some euro area countries have reintroduced tighter containment measures. This could delay the recovery, especially in travel, tourism, hospitality, and entertainment. The pandemic is weighing on consumer and business confidence and the spread of new virus variants is creating extra uncertainty."

SLOWER GROWTH

"Economic activity has been moderating over the final quarter of this year and this slow growth is likely to extend into the early part of next year."

TO TOP PRE-PANDEMIC OUTPUT

"We now expect output to exceed its pre-pandemic level in the first quarter of 2022."

EASING INFLATION

"Inflation is expected to remain elevated in the near term but should ease in the course of next year."

BELOW TARGET

"The inflation outlook has been revised up, but inflation is still projected to settle below our 2% target over the projection horizon."

HEADWINDS

"Energy prices have gone up significantly, and in some industries, there are shortages of materials, equipment, and labour. These factors are restraining economic activity and are a headwind for the near-term outlook."

LABOUR MARKET IMPROVING

"The euro area economy continues to recover and the labour market is improving, helped by ample policy support."

PICK-UP

"Growth is moderating, but we expect activity to pick up again strongly in the course of next year."

(Reuters Global News Desk)

Lagarde comments at ECB press conference
 

Related Articles

Cuba wins China debt relief, new funds
Cuba wins China debt relief, new funds By Reuters - Nov 27, 2022 2

By Marc Frank HAVANA (Reuters) - China has agreed to restructure Cuban debt and provide new trade and investment credits to the beleaguered Caribbean Island nation after a meeting...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email