European Central Bank President Christine Lagarde said on Tuesday that inflation is still too high and it is too early for the ECB to declare victory over rising consumer prices, CNBC reported.

Speaking at a banking event in Sintra, Portugal, she said: “Inflation in the euro area is too high and will remain so for too long. But the nature of the cause of inflation in the Eurozone is changing. This persistence is caused by the fact that inflation passes through the economy in stages, as different economic agents try to shift their costs to each other,” she added, as quoted by News.ro.

The general inflation in the Eurozone in May was 6.1% against 7% in April.

But the goal of the ECB is to reduce inflation to 2%.

The Eurozone has faced higher inflation rates, largely as a result of Russia’s invasion of Ukraine, which has led to higher energy prices in general.

However, in recent months, they dissipated, and food products rose in price the most.

“We have made significant progress, but in the face of a more persistent inflationary process, we cannot yet hesitate and declare victory,” she added.

The ECB raised interest rates from July 2022 by 4 percentage points.

Market players expect another interest rate hike next month and are eyeing another move in September.

Some economists are also questioning when the ECB might have to reverse this tighter policy, as they fear higher interest rates will significantly slow the economy.

However, on Tuesday, Lagarde suggested that it is too early to make such considerations. (News.ro)