ECB’s Lagarde says interest rates to stay high as long as needed to defeat inflation

By CHRISTOPHER RUGABER
AP Economics Writer

JACKSON HOLE, Wyoming (AP) — Interest rates in the European Union will need to stay high “as long as necessary” to slow still-high inflation, Christine Lagarde, president of the European Central Bank, said Friday. Lagarde’s remarks, at an annual conference of central bankers in Jackson Hole, Wyoming, came against the backdrop of the ECB’s efforts to manage a stagnating economy with still-high inflation. The central bank has raised its benchmark rate from minus 0.5% to 3.75% in one year. Inflation in the 20 countries that use the euro has dropped from a peak of 10.6% last year to 5.3%, largely reflecting sharp drops in energy prices. But inflation still exceeds the ECB’s 2% target.