This is not a paywall.

Register for free to continue reading.

We made a promise to you that we’ll never erect a paywall and we intend to keep that promise. We also want to continually improve your reading experience and you can help us do that by registering with us. It’s quick, easy and will cost you nothing.

Nearly there! Create a password to finish up registering with us:

Please enter your password or get a login link if you’ve forgotten

Open Sesame! Thanks for registering.

First Thing, Daily Maverick's flagship newsletter

Join the 230 000 South Africans who read First Thing newsletter.

We'd like our readers to start paying for Daily Maverick

More specifically, we'd like those who can afford to pay to start paying. What it comes down to is whether or not you value Daily Maverick. Think of us in terms of your daily cappuccino from your favourite coffee shop. It costs around R35. That’s R1,050 per month on frothy milk. Don’t get us wrong, we’re almost exclusively fuelled by coffee. BUT maybe R200 of that R1,050 could go to the journalism that’s fighting for the country?

We don’t dictate how much we’d like our readers to contribute. After all, how much you value our work is subjective (and frankly, every amount helps). At R200, you get it back in Uber Eats and ride vouchers every month, but that’s just a suggestion. A little less than a week’s worth of cappuccinos.

We can't survive on hope and our own determination. Our country is going to be considerably worse off if we don’t have a strong, sustainable news media. If you’re rejigging your budgets, and it comes to choosing between frothy milk and Daily Maverick, we hope you might reconsider that cappuccino.

We need your help. And we’re not ashamed to ask for it.

Our mission is to Defend Truth. Join Maverick Insider.

Support Daily Maverick→
Payment options

Business Maverick

Business Maverick

Lagarde Warns ECB Acting Too Fast Could Choke Economy’s Recovery

Christine Lagarde, president of the European Central Bank (ECB), speaks during a news conference in Frankfurt, Germany, on Thursday, Dec. 16, 2021. Euro-area economic activity slowed as rising coronavirus cases hurt service providers to offset an improvement in manufacturing output.
By Bloomberg
11 Feb 2022 0

European Central Bank President Christine Lagarde warned that the Governing Council would harm the economy’s rebound from the pandemic if it were to rush to tighten monetary policy.   

Raising interest rates “would not solve any of the current problems,” she told Redaktionsnetzwerk Deutschland in an interview released on Friday. “On the contrary: if we acted too hastily now, the recovery of our economies could be considerably weaker and jobs would be jeopardized.”While Lagarde said that the ECB “will act if necessary,” she went on to reiterate her view expressed to lawmakers on Monday that “all of our moves will need to be gradual.”

The remarks continue a softer message since Lagarde’s surprise pivot last week where she no longer excluded a rate hike this year, a shift toward the stance of global peers that prompted bets on faster tightening. That followed a run of surging inflation including the highest readings since the euro was created.

Inflation Outlook

Lagarde stressed that the euro zone can’t be compared to other major jurisdictions.

“The U.S. economy is overheated, whereas our economy is far from being that,” she said. “That’s why we can — and must — proceed more cautiously. We don’t want to choke off the recovery.”

Policy makers privately see a change in formal guidance materializing as soon as next month, when they’ll get new economic forecasts and reassess their bond-buying.

“Inflation may turn out to be higher than we projected in December,” Lagarde said. “We will analyze that in March, and then take it from there.”

growing number of ECB policy makers are losing faith in the institution’s current inflation forecasting, emboldening their shift toward hiking rates, officials with knowledge of the matter have told Bloomberg.

Lagarde cautioned that inflation is only likely to exceed the 2% goal in the medium term if wages were to “significantly and persistently” breach that level.

“We are not seeing that at the moment at all,” she said. “In most euro-area countries, including Germany, wage demands are very moderate.”


Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

No Comments, yet

Please peer review 3 community comments before your comment can be posted