ECB begins inflation fightback with July rate hike: Lagarde

ECB begins inflation fightback with July rate hike: Lagarde

AMSETRDAM: The European Central Bank on Thursday said it would raise interest rates for the first time in over a decade next month to combat runaway inflation, bringing the curtain down on the eurozone’s era of cheap money. ECB governors, exceptionally meeting in Amsterdam instead of Frankfurt, provided markets with an unexpectedly precise statement setting out their path to monetary policy normalization after years of ultra-low rates and easy credit.

The European Central Bank plans a series of rate hikes over the next months to battle sky-high inflation, President Christine Lagarde said Thursday, warning that the first rise in July will not immediately dampen soaring consumer prices. “Do we expect that July interest rate hikes will have an immediate effect on inflation? The answer to that is no,” she told journalists. Rather, the bank was planning “a series of moves over the course of the next months,” she said, in reference to planned rate rises.

Wages in the eurozone have begun to increase as workers in the bloc face record high inflation, Lagarde said Thursday, adding that the pay hikes could further accelerate as the economy strengthens. “Wage growth, including in forward-looking indicators, has started to pick up,” Lagarde said at a