European Central Bank head: Inflation may linger for longer

The head of the European Central Bank says record inflation could linger for “longer than expected” and avoided repeating that an interest rate increase was all but ruled out this year

FRANKFURT, Germany -- The head of the European Central Bank said record inflation could linger for “longer than expected” and avoided repeating that an interest rate increase was all but ruled out this year.

Asked twice by journalists Thursday, Christine Lagarde declined to reiterate her previous statement that a rate increase was “very unlikely” this year. She said officials would pay careful attention to the numbers and revisit their inflation stance at their March meeting.

At the same time, she said the bank would stick with its road map for withdrawing economic stimulus, which leaves little room for a rate hike this year. Any hike would have to follow the end of bond purchases, slated for October at the earliest.

And she maintained her view that the primary factors behind high inflation were expensive oil and gas and supply chain logjams, which could ease this year.