Rising energy prices and ongoing bottlenecks in supply chains could keep high inflation going for longer than expected next year. This was announced in the European Parliament by European Central Bank President Christine Lagarde on Monday.
“While the duration of the supply-side problems is uncertain, it is likely to last for several months and only decline gradually over the course of 2022,” Lagarde said at the European Parliament’s Economic Affairs Committee. “We still expect inflation to subside, but it will take longer than originally expected.”
Despite this, Lagarde no longer changed course. According to the French, the conditions for raising interest rates next year are still unlikely to be met. Inflation rose to 4.1 percent in October, but the European Central Bank still expects annual inflation to eventually fall below its 2 percent target next year.
Meanwhile, Germany again on Monday called for tighter monetary policy to counter strong inflation. “This supposed panacea of the past few years – low interest rates with ostensibly stable rates – has lost its effect, we are all grappling with side effects now. Monetary policy must confront this, sooner rather than later,” Deutsche Swing said. CEO Christian Swing Bank.
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