Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Lagarde: Expect ECB to Hike Rates Over "Next Several Meetings"

Economy Sep 26, 2022 09:47AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters
 
EUR/USD
+0.51%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Scott Kanowsky

Investing.com -- The European Central Bank is expected to raise interest rates further over its "next several meetings" in a bid to tamp down soaring inflation, according to ECB president Christine Lagarde.

Speaking at a hearing of the European Parliament's Committee on Economic and Monetary Affairs, Lagarde said these hikes will help dampen demand, which would theoretically cool red-hot consumer price growth.

Lagarde added that higher borrowing costs will "guard against the risk of a persistent upward shift in inflation expectations." The ECB's baseline estimates for annual Eurozone inflation have been revised up significantly, with the central bank now seeing the figure at 8.1% in 2022, 5.5% in 2023, and 2.3% in 2024.

Inflation rose to an all-time high of 9.1% year-on-year in August, boosted in particular by surging energy prices stemming from Russia's decision to clampdown on key gas exports in response to Western sanctions following the outbreak of the war in Ukraine. Economists estimate that prices in the region will expand by a new record of 9.7% this month.

"Price pressures are spreading across more sectors, in part owing to the impact of high energy costs across the whole economy," Lagarde told lawmakers in Brussels.

"The risks to the inflation outlook are primarily on the upside, mainly reflecting the possibility of further major disruptions in energy supplies."

The depreciation of the euro, which has fallen below parity with the dollar as investors fret about the outlook for the Eurozone economy, has also added to inflationary pressures, Lagarde said.

Meanwhile, Lagarde predicted that wage growth, although contained at the moment, will eventually accelerate to "compensate" for higher inflation.

She added that economic growth in the currency bloc is expected to slow "substantially" in the coming quarters as inflation, as well as a series of subsequent rate hikes by central banks around the world, lead consumers to rein in spending. A post-pandemic recovery in the services sector is also seen "losing steam."

Finally, uncertainty over the Eurozone's future remains high, Lagarde said, as reflected in a slump in household and business confidence. Earlier on Monday, a monthly survey showed that business sentiment in Germany - Europe's largest economy - had fallen to its lowest level since the early days of the pandemic.

Lagarde: Expect ECB to Hike Rates Over "Next Several Meetings"
 

Related Articles

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.
Comments (2)
Todd Gray
Todd Gray Sep 27, 2022 12:35AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
These low interest rates are the fantasies young people think of as entitlements. Go look at any 125 year interest rate chart. You are in the death throws of an interest rate cycle dating back to the 40's. Wake up. There has never been a economic bubble on earth such as this. Not even close. And, your beloved politicians did this to you, your families, and your friends. Maybe it's time to consider voting for sensible leaders, instead of the same old and corrupt ones?
Christo Kanev
Christo Kanev Sep 26, 2022 10:18AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
disappointing...
 
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