Prices will not return to pre-pandemic levels; there will be reconversion: C. Lagarde

The inflation it will not return to pre-pandemic levels. There are too many changes in globalization that make us anticipate that there will be no return to the previous situation, warned the president of the European Central Bank, Christine Lagarde.

The interruption of supply chains, the bottlenecks that have arisen after the pandemic and now with the war make us suppose that the way in which goods are produced will change, he predicted.

By participating in a high-level conference with the president of the Federal Reserve from the United States, Jerome Powellthat of the Bank of England, Andrew Bailey as well as with the General Manager of the Bank for International Settlements (BIS), Augustine Carstensanticipated that a “reconversion” will come where countries will decide on providers based on their geographical proximity, rather than costs.

This will also have an impact on inflation, he stressed.

About the next ECB monetary announcement, scheduled for July, the central banker anticipated that they will apply a tool “sufficiently effective and proportional to the challenge that inflation represents.”

He recognized that the problem of indebtedness between the countries of the Eurozone it is a risk factor in the context of rate hikes. However, he explained that it is a minor risk in the environment of escalating prices that is being faced, particularly energy prices.

Currently inflation in the Eurozone exceeds 8.1%; At the last monetary meeting in June, the ECB confirmed its intention to raise rates that have been below zero since 2014.

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