“There are upside risks to inflation in the short term but also in the medium term.” This is what ECB President Christine Lagarde said, answering a question in the press conference following the announcement of rates by the central bank.
The ongoing conflict between Russia and Ukraine, Lagarde said, will have an impact on the euro area economy with rising energy prices and falling confidence.
“The war will have a significant impact on economic activity and inflation, through higher energy and commodity prices, disruptions to international trade and lower confidence,” Lagarde said.
Lagarde added that the intensity of the effects “will depend on the development of the war, the impact of the sanctions (imposed on Russia) and possible further measures”.