ECB President clarifies that interest rates would remain high "as long as necessary"

The Head of the European Central Bank, Christine Lagarde, announced that interest rates would remain elevated for "as long as necessary" to combat inflation, even though she expressed sympathy for homeowners who have experienced increases in their mortgage payments.

As reported by AP, Lagarde emphasized that interest rates would remain high due to the persistent upward pressure on prices in the 20 countries that utilize the euro currency. This decision reflects the central bank's commitment to addressing and curbing inflationary pressures within the Eurozone.

“Strong spending on holidays and travel” and increasing wages were slowing the decline in price levels even as the economy stays sluggish, she said. Annual inflation in the eurozone eased only slightly from 5.3% in July to 5.2% in August.

“We remain determined to ensure that inflation returns to our 2% medium-term target in a timely manner”, Lagarde said while talking to the European Parliament’s committee on economic and monetary affairs. “Inflation continues to decline but is still expected to remain too high for too long”.