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31 Oct, 2022 11:39

‘Inflation came from nowhere’ – Lagarde

Putin and the pandemic are behind the worsening cost-of-living crisis in the EU, the head of the European Central Bank claims
‘Inflation came from nowhere’ – Lagarde

The European Central Bank (ECB) has doubled its key interest rate to the highest level in more than a decade in an attempt to combat soaring inflation, ECB President Christine Lagarde has explained.

In October, the inflation rate in the Eurozone reached 10.7%, according to official preliminary data, released on Monday.

In an interview with Irish state broadcaster RTE on Friday, Lagarde said: “We do it because we are fighting inflation” that had “pretty much come about from nowhere.” She pointed to a speedier-than-expected economic rebound from the pandemic as a cause alongside “the energy crisis caused by Mr. Putin who has decided in an unjustifiable way to invade another country.” 

The ECB chief added: “That’s what he [Putin] is trying to do, cause chaos and destroy as much of Europe as he can. This energy crisis is causing massive inflation which we have to defeat.”

She went on to say that “Anybody who is behaving in that way has to be driven by evil forces,” and that the “sick” Russian president is a “terrifying person.”

Discussing her previous meetings with the Russian leader, Lagarde described him as an “unbelievably super-briefed person” with “flashing, freezing eyes.”

After expressing her view, Lagarde however stressed that she’s “just a central banker,” and “shouldn’t be saying all these things.” 

On Thursday, the ECB announced another interest rate hike, taking Eurozone rates to the highest level since 2009. According to Lagarde, they are aimed at bringing inflation back to “reasonable levels so the cost of living isn’t as high as it is for people.” In October, inflation across the euro area hit 10.7%, according to preliminary data from Eurostat.

The EU has blamed Russia for the spiraling energy crisis across the continent. However, many economists point to the bloc’s fiscal policy responses as a major reason behind the crisis. Moscow has also criticized the “illogical and often absurd” moves by Western nations, saying that the sanctions imposed by the US, EU, and other countries on Russia have backfired and resulted in a sweeping energy crisis as well as record inflation across the West.

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