Lagarde: Price rises have become more widespread
European Central Bank (ECB) Christine Lagarde said on Thursday that inflation has become more widespread due to energy costs, supply bottlenecks and the normalization of demand. She said the downside risks to the growth outlook "have increased substantially" as a result of the Russia-Ukraine conflict, which could worsen supply constraints. "Persistent high energy costs, together with the loss of confidence, could drive down demand and strain consumption and investment more than expected," she warned.
The upside risks to inflation have intensified, especially in the near term, Lagarde noted. "The risks to the medium-term inflation outlook include above-target moves in inflation expectations, higher-than-anticipated wage rises and a durable worsening of the supply-side conditions. However, if demand were to weaken over the medium term, it would lower the pressure on prices," she assessed.