Against early tightening

Europe’s monetary watchdogs will not let the sharp rise in inflation rates force them to exit the policy of cheap money more quickly. “At a time when purchasing power is already being diminished by higher energy and fuel costs, an inadequate tightening would mean an unjustified headwind for the upswing,” said ECB boss Christine Lagarde at the European Banking Congress. From the ECB’s point of view, a large part of the surge in inflation can be explained by special factors. The Governing Council will hold its next regular monetary policy meeting on December 16.

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