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European central bank head says interest rate increase unlikely for 2022

Christine Lagarde says high inflation likely to climb further until end of this year

The European Central Bank chief on Friday said an interest rate increase in 2022 looks unlikely, despite the region struggles with record high inflation.

“Conditions to raise rates are very unlikely to be satisfied next year,” Christine Lagarde said at the Frankfurt European Banking Congress.

The central bank “must not rush into a premature tightening” of its monetary policy, she added.

Lagarde’s comments came at a time when inflation in the region has reached its highest level in almost 25 years.

Euro area posted an annual inflation rate of 4.9% in November, the highest rate since 1997,according to provisional figures released by Eurostat.

Although Lagarde said inflationary pressures are “unwelcome and painful,” she noted that high inflation is likely to climb further until the end of this year.

She also warned that inflationary pressures would “probably” slow the pace of economic recovery in the short-term.

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