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Euro zone inflation hump near its peak, will decline next year: Lagarde -Breaking


© Reuters. FILE PHOTO. Christine Lagarde, President of European Central Bank, reacts to a news conference about the outcomes of the Governing Board meeting in Frankfurt (Germany), October 28th, 2021. REUTERS/Kai Pfaffenbach//File Photo

FRANKFURT (Reuters – Euro zone inflation remains temporary. It may have reached its peak, but a fall that continues through the next year is expected, Christine Lagarde from European Central Bank said.

“I see an inflation profile that looks like a hump,” Lagarde said in an interview at  the  Reuters Next conference. “And eventually, a Hump will decline.”

She stated, “We remain firmly in the view and I am confident that inflation will fall by 2022.”

Lagarde’s remarks come as inflation in the 19-country currency block soared past 4.9% last month. That’s more than twice what the ECB wants to see at 2%. However, indicators indicate that it won’t fall below that mark until 2022 or later.

Inflation will make it difficult for the ECB to hold its critical Dec. 16 policy conference. There, policymakers almost certainly will end a 1.85 Trillion euro emergency stimulus plan but they will also be considering increasing support measures to help fill the void.

Although policy doves are the majority and have advocated ample support beyond emergency measures, there is a risk that inflation will exceed the ECB target. This could fuel conservatives who would like the ECB not to move back even a notch.

To watch the Reuters  Next conference please register here https://reutersevents.com/events/next/

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.