ECB/Lagarde: "We Are Very Close to Announcing That We Have Bring Inflation to Our Mid-Term Target in a Sustainable Manner"

Forex - European Central Bank (ECB) President Christine Lagarde stated that they are very close to declaring that they can bring inflation sustainably to their medium-term target of 2%.

Speaking to Martin Wolf from the Financial Times, Lagarde said, “I say this with some hesitation because I still believe we need to be very careful about services. As you know, inflation, the last figure we have is 2.2%. However, services are still at 3.9 and not changing much. It hovers around 4. It's starting to decrease a bit now. Some of the core inflation figures and measures we have are also moving correctly downwards. However, I think we need to be cautious and careful in three areas.”

Lagarde pointed out that there is a lag between price increases and wage increases, saying, “I think we are approaching the end of this process where wages are catching up with prices. We have a great tool called the wage tracker that brings together collective bargaining readings from seven key countries in Europe and gives us indications of where wages will go in the next one, two, or three years depending on how long the collective agreements are. However, signals that they will continue to race in a way consistent with our targets are also reassuring.”