Hard to say if inflation has peaked: ECB president

EUROPEAN Central Bank president Christine Lagarde said on Tuesday it was difficult to predict whether inflation had peaked, after eurozone consumer prices hit a record due to rising energy costs.

Inflation in the 19-country single currency area accelerated to 10 per cent in September, following Russia’s shutdown of crucial gas supplies as tensions soar over the Ukraine war.

Speaking at an event in Cyprus, Lagarde said that inflation was “undesirably high”.

“Is it at its peak? Difficult to say, and I’m not going to venture there,” she said.

But she signalled her determination to pull prices back down to the ECB’s two-per cent target: “We want to bring it back from where it is now.”

“If you let inflation run loose, to bring it back you have to fight really hard. And it hurts.”

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She also added that “we should certainly not stimulate demand even more”.

The central bank increased interest rates by a record 75 basis points at its last meeting in September, and has indicated it will implement further hikes to cool prices.

But fears are growing that the aggressive rate hiking cycle could help push the eurozone into a recession. AFP