The inflationary crisis will only have a solution if companies are willing to sacrifice their profit margins, he warned Christine Lagarde, President of the ECB, this Thursday in Sintra. It will be mainly in their hands -companies, in general- to prevent the monetary authority from having to raise interest rates even more and having to keep them at “restrictive” levels for longer than desirable. Although the rate of price increases seems to have eased in recent months, inflation remains at three times the ECB’s target (2%) – It’s too soon so to claim victoryLagarde warned.
The Frenchwoman did not want to take advantage of her speech at the ECB Forum in Sintra to give big “clues” about the next concrete steps in monetary policy (as has happened in the past). Lagarde limited herself to reiterating that at the end of July there should be a new rise in interest rates – another 25 points that will raise the interest rate on deposits (the most important at the moment) up to 3.75%, the highest level since October 2000.
And what happens after the summer? Much will depend on how companies transmit -or not- the recent fall in the prices of raw materials with the same speed with which they transmitted the rises, shot the president of the ECB, in one of several notices and messages left in Sintra.
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Source: Observadora
