ECB ready to raise rates if inflation spike persists, Lagarde says in World Economy News 29/03/2026 The European Central Bank stands ready to increase interest rates if a projected rise in euro zone inflation proves more than temporary, ECB President Christine Lagarde said. Speaking at “The ECB and Its Watchers” conference in Frankfurt, Germany, Lagarde said a measured policy adjustment could be warranted if inflation overshoots the bank’s target in a way that is large but not too persistent. “If the shock gives rise to a large, though not-too-persistent, overshoot of our [inflation] target, some measured adjustment of policy could be warranted,” Lagarde told the audience. She added that failing to address such an overshoot could create a communication risk, as the public may struggle to understand a reaction function that does not respond. Lagarde did not provide a specific timeline or criteria for when the central bank might consider an interest rate hike necessary. The ECB kept interest rates unchanged at its monetary policy meeting last week. At that meeting, the central bank forecast euro zone inflation to average 2.6% in 2026. Before the Iran conflict began in late February, the euro zone’s inflation rate had fallen below the ECB’s 2% target. In February, the rate rose to 1.9%. The war and Tehran’s near-total blockade of the Strait of Hormuz have driven global oil and gas prices higher and disrupted inflation forecasts in Europe. In a more adverse scenario, the central bank warned that inflation could reach 4% this year. In the most severe base case, which assumes a stronger and more persistent energy price shock and further destruction of Gulf energy infrastructure, the rate could peak above 6% early next year. “If we expect inflation to deviate significantly and persistently from target, the response must be appropriately forceful or persistent,” Lagarde said Wednesday. Separately on Wednesday, ECB chief economist Philip Lane said the bank will monitor companies’ price-hike expectations and wages for new hires as key inflation indicators. Source: Investing.com 2026-03-29 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, fjs); }; load('//connect.facebook.net/en/all.js#xfbml=1', 'fbjssdk'); load('https://apis.google.com/js/plusone.js', 'gplus1js'); load('//platform.twitter.com/widgets.js', 'tweetjs'); } if (w.addEventListener) { w.addEventListener("load", go, false); } else if (w.attachEvent) { w.attachEvent("onload",go); } }(window, document, 'script')); tweet Share