Lagarde says rates and energy prices do not move in lockstep
The ECB president points to growth and consumption as the real drivers of policy, even as colleagues flag rising inflation risk
Published
European Central Bank President Christine Lagarde said interest rates do not rise or fall together with energy prices. She said growth and consumption matter more, and that the path ahead is uncertain.
Lagarde also said there is no sign of second round inflation effects, meaning higher costs have not yet fed into broader wage and price gains.
Her comments come as euro-area households have grown more worried about inflation. The ECB's own monthly survey found one-year inflation expectations rose to 3.0% and three-year expectations to 2.9%, both up from July.
Other Governing Council members have struck a different tone. Olli Rehn said the inflation picture has shifted since the bank's comfort zone. Gabriel Makhlouf said every meeting is live and that inflation risks skew higher.
The gap between Lagarde's framing and her colleagues' warnings points to a split inside the Governing Council over how to read the current data. Lagarde's stress on growth and consumption, paired with her uncertainty language, suggests she may resist market pressure for further tightening, even as other policymakers argue the inflation risk has already moved higher.