"Our future decisions will ensure that policy rates are raised to sufficiently restrictive levels to achieve a timely return of inflation to our medium-term objective of 2% and will be maintained at those levels for as long as necessary." The President of the European Central Bank, Christine Lagarde, in a hearing at the Economic Committee of the European Parliament, returns to the "theme of issues", relating to the economic trend and the variable "inflation", which for months has been conditioning the markets and economies of Europe (and beyond).

"We will continue to follow a data-dependent approach to determine the appropriate level and duration of the restriction," Lagarde said, noting that "inflation, excluding energy and food, fell to 5.3% in May from 5.6% in April" and indicated that "upward pressures on headline and core inflation continue to come from the transmission of past increases in the cost of energy and supply bottlenecks, which, however, should gradually subside".

"The latest available data suggest that indicators of underlying inflationary pressures remain high and, although some show signs of moderation, there is no clear evidence that underlying inflation has peaked," she said. Wage pressures have strengthened further as employees regain some of the purchasing power lost due to high inflation. And in some sectors, companies have been able to increase profit margins thanks to supply-demand imbalances and uncertainty created by high and volatile inflation."

Stop measures to combat the cost of energy

"As the energy crisis eases, eurozone governments should promptly and concertably withdraw the related support measures" adopted in recent months, "to avoid increasing medium-term inflationary pressures, which would require a more vigorous monetary policy response," she said. The European Central Bank also "welcomes the European Commission's recommendation to member countries to reduce the measures taken in response to the energy price shock in 2023".