European Central Bank head sees more volatile inflation as global uncertainty grows: ‘It’s pretty basic but that’s the reality’
The European Central Bank president said that inflation has become more unpredictable due to shocks such as the Covid-19s and Russia’s invasion of Ukraine-and that politics need to take the possibility of such extremist scenarios into consideration and their communication to the public as well.
“The next world is more nonexistent, and this uncertainty is possible to make this volatility,” Christine Lagarde, President of the European Central Bank, said on Monday in the opening speech of the Central Bank of Bank conference in Senra, Portugal. “It is very essential but this is the reality.”
She said that one of the reasons is that the increasingly regular display disturbances were leading companies to change their prices frequently, and they usually exceed the explosion of the last inflation in the United States and Europe and “reflect a structural shift in how companies work under conditions higher than permanently uncertainty.”
She said that the bank’s evaluation of the economy needs to rely on taking the possible extremist scenarios in mind as well as the most likely basic predictions, and the public must be allowed to potential communications as well. Lagarde is in particular the high inflation that followed Russia’s invasion of Ukraine, where the foundation line scenario based on high energy prices indicates 2022 inflation by 5.5 %-but the worst scenario of more than 7 % of inflation, closer to the final number of 8 %.
Another example is the epidemic, as spending by consumers turned to the home from services such as restaurants to goods such as home exercise equipment.
“The scenario analysis could have helped clarify that the scope of the potential inflation results were unusually wide – and would have reduced the risk of dropping the wrong certainty of the public,” said Lagarde.
The bank’s strategy review announced on Monday that its 2 % goal of inflation, the goal he achieved at the present time as the annual rates of prices were 1.9 % in May. The bank’s low inflation allowed to reduce the standard interest rate from the peak of 4 % to 2 %.
High -definition threats added from US President Donald Trump to uncertainty about growth and inflation. European negotiators and US negotiators are trying to reach an agreement on a trade deal before the deadline on July 9.
The conference in Sentra is the equivalent of the European Central Bank for the American Federal Reserve in Jackson Hall, Wyoming, and brings together the best banker and economists from all over the world. Federal Reserve Chairman Jerome Powell will participate in a committee on Tuesday with Lagarde, the government of the Bank of England Andrew Billy, the governor of Korea Bank, Zhang Yong Rida, Kazo Oda, the governor of the Bank of Japan.
2025-07-01 13:06:00
