European Central Bank President Christine Lagarde said Monday that it was possible that the euro area inflation could become stronger, but the risks of such a scenario were limited. "While inflation could prove weaker than foreseen if economic activity were to be affected by a renewed tightening of restrictions, there are some factors that could lead to stronger price pressures than are currently expected," Lagarde said at a virtual hearing of the European Parliament. Prolonged supply shortages could lead to higher prices and stronger inflation could also result in higher than anticipated wage demands, the ECB chief said. "But we are seeing limited signs of this risk so far, which means that our baseline scenario continues to foresee inflation remaining below our target over the medium term," Lagarde added. Eurozone inflation hit a decade-high 3.0 percent in August. Early this month, the ECB raised the headline inflation projection for this year to 2.2 percent and the outlook for next year was lifted to 1.7 percent. The projection for 2023 was raised to 1.5 percent. Projections for core Inflation, which excludes food and energy prices, were raised to 1.3 percent this year, 1.4 percent in 2022 and 1.5 percent in 2023.
Lagarde said the recent increase in underlying price pressures is consistent with the opening up of the economy, which remains some distance away from operating at full capacity.
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April 17, 2026 15:29 ET The ongoing conflict in the Middle East continues to raise concerns for policymakers who worry about the impact of the supply shock and high energy prices on the real economy. Producer price data and various survey results on the housing market were the main news from the U.S. this week. In Europe, industrial production data for the euro area gained attention. GDP figures out of China and the policy move by the Singapore central bank were in focus in Asia.