In August, inflation rose to more than nine percent in the euro area, and the ECB raised its key interest rate by a record 0.75 percentage points in September.
European the central bank (ECB) will continue to raise interest rates to curb inflation despite the growing threat of recession, said the bank’s governor Christine Lagarde on Monday according to news agency AFP.
“We anticipate that we will raise the interest rate even more during the next meetings,” said Lagarde to the European Parliament’s committee.
In August, inflation in the euro area rose to a record high of 9.1 percent. In September, consumer prices in the euro area rose even higher, especially due to the rise in energy prices due to Russia’s attack on Ukraine.
In response to the rise in prices, the ECB raised its key interest rate by a record 75 basis points, or 0.75 percentage points.
Lagarde according to the ECB expects economic activity to slow down considerably in the coming quarters due to inflation and reduced consumption.
Economic growth is still predicted for the eurozone next year. According to Lagarde, however, recession is also possible in an unstable and difficult to predict situation, and the situation will get harder before it gets easier.
“It will be a difficult year for sure,” said Lagarde.
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