ECB President Lagarde:
Risks to the growth outlook are to the downside
Some indicators of underlying inflation have been driven higher by energy shock
Firms are getting ready to pass on higher input prices
Households in solid financial position
Consumption is a driver of growth
The conflict is weighing on activity
Domestic demand weaker than projected in March
Most measures of inflation expectations stand at around 2%
The drag on growth would worsen if shipping remains closed
Inflation risks are to the upside
Financial conditions tighter than before war
Downside growth risks and upside inflation risks aren’t a good mix.
Comments in the Q&A:
Decision was unanimous and we did not debate any other proposal
Under the present situation, there is no forward guidance
There will be no pre-set rate path
Services inflation has moved to 3.5% from 3.0%
We need to better understand what part of that is indirect and direct from energy
Haven’t yet seen second-round effects
We are not in that “let’s see through it” phase on war inflation
Today’s decision not “a forceful one”