Lagarde Says ECB ‘Absolutely’ Must Avoid Second-Round Effects

The European Central Bank “absolutely” wants to avoid high inflation leading to excessive upward pressure on wages, and its recent interest-rate hikes should signal its determination to meet its price target, President Christine Lagarde said.

Euro-area inflation, which reached a fresh record of 9.1% in August, is being driven to a large degree by soaring energy costs resulting from Russia’s war in Ukraine, but the ECB must take action to prevent broader price increases from becoming entrenched, she said at an event in Paris.