Lagarde downplays the risk of inflation broadening from rising energy prices, stresses that wage pressures remain moderate; probability of an ECB rate hike in December rises to 88%

Zhito Finance APP has learned that European Central Bank President Lagarde stated on Thursday that although the continued surge in energy prices caused by the Middle East conflict has pushed euro area inflation further higher, no clear signs have yet been found that rising energy costs are being significantly passed through to wages and prices of other goods and services. She stressed that the European Central Bank will closely monitor underlying inflation and wage growth, and will decide the direction of monetary policy meeting by meeting based on economic data. Although the European Central Bank decided that day to keep interest rates unchanged, Lagarde did not rule out the possibility of further rate hikes, and the market now sees the probability of a 25-basis-point rate hike in December as having risen to 88%.