Lagarde says rising energy prices are keeping inflation high, while the ECB maintains a “measured” response through interest rates - Informat.ro

Euro area inflation rose to 3.2% in August, from 2.9% in July, against the backdrop of an increase in energy inflation to 14.3%. Christine Lagarde told MEPs that the ECB sees higher inflation but does not currently observe a material transmission of the energy shock into wages, following the 25-basis-point increase in all three key interest rates in September. The European Central Bank believes that the energy shock continues to push euro area inflation above the 2% target, but it still sees no signs that this pressure has become embedded in wage dynamics or core inflation to an extent that would justify a more aggressive tightening of monetary policy.