By Hans Bentzien
FRANKFURT (Dow Jones)–According to the Governing Council of the European Central Bank (ECB), economic momentum in the euro area weakened significantly in the third quarter and is likely to continue to decline. ECB President Christine Lagarde said in her press conference after the council meeting that while the unemployment rate remains very low and job creation continues, unemployment could rise in the future with an economic slowdown. “The risks to growth are clearly on the upside,” said Lagarde.
At the same time, the ECB President pointed out that the price pressure had increased and spread. According to Lagarde, most indicators of long-term inflation expectations are anchored at 2 percent. However, some indicators have risen beyond what needs to be monitored. According to Lagarde, the inflation risks are mostly on the upside.
The Governing Council of the ECB had previously decided to raise key interest rates by 75 basis points and announced further rate hikes. In addition, the Governing Council changed the terms of the third series of long-term targeted refinancing operations (TLTRO3) and decided to align the interest rates on banks’ required reserves with those on their surplus investments.
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(END) Dow Jones Newswires
October 27, 2022 09:02 ET (13:02 GMT)