Status: 01/19/2023 5:00 p.m
The European Central Bank is not moving away from the newly adopted interest rate. In the fight against persistently high inflation in the euro zone, ECB President Lagarde announced further increases at the World Economic Forum in Davos.
European Central Bank (ECB) President Christine Lagarde has described euro-zone inflation as “far too high” despite the recent decline. At the World Economic Forum in Davos, Lagarde made it clear that the central bank must remain “on course” in the fight against inflation.
Inflation, at an annual rate of 9.2 percent in December, is just below the record high of more than 10 percent in October. Most recently, at the interest rate meeting in December, the ECB President spoke out in favor of further interest rate hikes of 0.50 percentage points each in order to get inflation under control. The aim is to bring the rate of inflation back up to the ECB’s medium-term target of two percent.
Stock exchanges react with uncertainty
The stock exchanges reacted promptly to the statements made by the head of the ECB in Davos. The DAX temporarily increased its losses and was 1.57 percent lower at 14,943 points. Recently, falling inflation rates had fueled speculation that the major central banks would slow down interest rates on the financial markets.
Despite the difficult economic situation, which is currently also reflected in the high inflation, Lagarde also sees positive signals for the euro zone. The growth projections for 2023 would be 0.5 percent, said Lagarde: “So this is not a brilliant year, but it is much better than what we feared.”