ECB shouldn’t overreact to temporary inflation spike, Lagarde says
MONEY & BUSINESS;
FILE PHOTO: The European Central Bank (ECB) logo in Frankfurt, Germany, January 23, 2020. REUTERS/Ralph Orlowski/File Photo
September 28, 2021
FRANKFURT (Reuters) – European Central Bank President Christine Lagarde continued play down inflation worries on Tuesday and warned against overreacting to a temporary spike in prices.
“The key challenge is to ensure that we do not overreact to transitory supply shocks that have no bearing on the medium term, while also nurturing the positive demand forces that could durably lift inflation towards our 2% inflation target,” she told an ECB conference.
“We will only react to improvements in headline inflation that we are confident are durable and reflected in underlying inflation dynamics,” she said. “We see no signs that this increase in inflation is becoming broad-based across the economy
(Reporting by Balazs Koranyi; Editing by Francesco Canepa)