ECB chief: Limiting fast wage growth is needed to rein in inflation
‘We must not allow inflationary expectations to become de-anchored or wages to have an inflationary effect,’ Lagarde tells Croatian newspaper.
Wages in the eurozone are increasing faster than previously estimated, and the European Central Bank must prevent this from adding to already high inflation in the currency bloc, ECB President Christine Lagarde said.
“We know wages are increasing, probably at a faster pace than expected,” Lagarde told Croatian newspaper Jutarnji list, ahead of Croatia joining the currency bloc. “We must not allow inflationary expectations to become de-anchored or wages to have an inflationary effect.”
Lagarde added that, at the moment, the ECB’s interest rates must be higher in order to curb inflation. The central bank has to “take the necessary measures” to lower inflation to 2 percent from its current rate of near 10 percent in the eurozone, she said.
h/t BoatSurfer600