DAVID MCHUGH
FRAThe head of the European Central Bank said Monday that interest rates will stay high enough to restrict business activity for “as long as necessary” to beat back inflation. Still, she sympathized with homeowners who have seen their mortgage payments jump.
Christine Lagarde said rates would stay high because upward pressure on prices “remains strong” in the 20 countries that use the euro currency.
“Strong spending on holidays and travel” and increasing wages were slowing the decline in price levels even as the economy stays sluggish, she said. Annual inflation in the eurozone eased only slightly from 5.3% in July to 5.2% in August.
“We remain determined to ensure that inflation returns to our 2% medium-term target in a timely manner,” Lagarde told the European Parliament’s committee on economic and monetary affairs. “Inflation continues to decline but is still expected to remain too high for too long.”
The
You’ve reached your free article limit
Subscribe to enjoy unlimited access to trusted journalism. Cancel anytime.
Subscribe nowNeed help? molokom@insidepolitic.co.za
