FRANKFURT (Reuters) – The European Central Bank (ECB) will continue to raise interest rates and may even have to restrict economic activity to curb inflation, its president Christine Lagarde said on Friday.
“We expect to raise rates further – and the withdrawal of accommodative measures may not be enough,” she said during a speech at the European Banking Congress in Frankfurt.
“Interest rates remain, and will remain, the main measure for adjusting the direction of our policy,” she added. “But we also need to standardize our other monetary policy tools and thus strengthen the impetus of our action on rates”.
The ECB has been engaged since the spring in a process of raising its key rates at an unprecedented pace and has hinted that this movement will continue in the months to come, with the aim of bringing inflation back towards its target of 2%.
(Report Balazs Koranyi and Francesco Canepa, Blandine Hénault for the French version, edited by Kate Entringer)
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